Annual Report 2018 | 2019
Years Of Keeping You Safe In The Sky
1998 – 2018
ANNUALREPORT 2018 2019 PART A General Information 1 General Information 1 2 List of Abbreviations and Acronyms 2 3 List of Diagrams, Figures, Graphs and Tables 3 4 Foreword by the Chairperson of the Board 4 5 Overview by the Director of Civil Aviation 6 6 Statement of Responsibility and Confirmation of Accuracy of the Annual Report 10 7 Strategic Overview 11 8 Legislative and other Mandates 12 9 High-Level Organisational Structure 13 10 Board Composition 14 11 Executive Management Committee 15
PART B Performance Information 1 Statement of Responsibility for Performance Information for the Year Ended 31 March 2019 17 2 Auditor’s Report: Predetermined Objectives 18 3 Situational and Performance Analysis 19 4 Strategic Outcome-Oriented Goals 25 5 Performance Information 26 6 Review of SACAA Programmes and Activities 38 7 Strategy to Overcome Areas of Underperformance 40 8 SACAA Revenue Collection 50
PART C Governance 1 Introduction 52 2 Accounting Authority 57 3 Audit and Risk Committtee 67 4 Risk Management 70
Contents 5 Internal Control Unit 72 6 Internal Audit 72 7 Combined Assurance Model 73 8 Fraud and Corruption 75 9 Minimising Conflict of Interest 75 10 Code of Conduct 76 11 Health, Safety and Environmental Matters 76 12 Company Secretary 77 13 Corporate Social Responsibility 77
PART D Human Resources 1 Overview of Human Resources Matters 85 2 Human Resource Oversight Statistics 87
PART E Annual Financial Statements 1 Report of the Auditor-General to Parliament on the South African Civil Aviation Authority 98 2 Accounting Authority’s Responsibilities and Approval 102 3 Audit and Risk Committee Report 104 4 Accounting Authority’s Report 108 5 Company Secretary’s Certification 112 6 Statement of Financial Position 113 7 Statement of Financial Performance 114 8 Statement of Changes in Net Assets 115 9 Cash Flow Statement 116 10 Statement of Comparison of Budget and Actual Amounts 117 11 Notes to the Consolidated Annual Financial Statements 119 31 August 2019
Mr Fikile April Mbalula, MP Minister of Transport Private Bag X193 PRETORIA 0001
Honourable Minister Mbalula,
It is a privilege and honour to hereby submit the 2018/2019 Annual Report of the South African Civil Aviation Authority (SACAA). This report gives a comprehensive account of the SACAA’s performance and efforts to fulfil its mandate for the period 01 April 2018 to 31 March 2019.
Yours sincerely,
______Mr Ernest Khosa Chairperson: SACAA Board
Annual Report 2018 | 2019 v PART General Information PART A - General Information PART A General Information
General Information
REGISTERED NAME: South African Civil Aviation Authority
PHYSICAL ADDRESS: Ikhaya Lokundiza 1 16 Treur Close Waterfall Park Bekker Street Midrand, Johannesburg
POSTAL ADDRESS: Private Bag X73 Halfway House 1685
TELEPHONE NUMBER: +27 11 545 1000
FAX NUMBER: +27 11 545 1455
EMAIL ADDRESS: [email protected]
WEBSITE ADDRESS: www.caa.co.za
EXTERNAL AUDITORS: Auditor-General of South Africa
BANKERS: Standard Bank of South Africa
COMPANY SECRETARY: Ms Nivashnee Naraindath (BA, LLB, LLM, Admitted Attorney)
ISBN NUMBER: 978-0-621-47376-6
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Abbreviations and acronyms
ACSA Airports Company South Africa GA General Aviation ADO Approved Design Organisation HR Human Resources AEP Aviation Environmental Protection HRC Human Resources Committee AFCAC African Civil Aviation Commission IATA International Air Transport Association AGM Annual General Meeting ICAD International Civil Aviation Day AGSA Auditor-General of South Africa ICT Information and Communication AIID Accident and Incident Investigations Technology Division ISO International Standard Organisation AIP Aeronautical Information Publication IT Information Technology AMO Aircraft Maintenance Organisation MOSP Master Oversight and Surveillance Plan AMORG Approved Manufacturing Organisation NATS National Aviation Transformation Strategy AOC Air Operator Certificate NDP National Development Plan ARC Audit and Risk Committee NTCA Non-Type-Certified Aircraft ASC Aviation Security Committee NUMSA National Union of Metal Workers of ASEC Aviation Safety and Environment South Africa Committee OHS Occupational Health and Safety ASO Aviation Safety Operations PANS-OPS Procedure for Air Navigation Services - ATNS Air Traffic and Navigation Services Aircraft Operations ATO Aviation Training Organisation PESTLE Political, Economic, Social, Technological, AvMed Aviation Medicine Legal, and Environmental AvSec Aviation Security PFMA Public Finance Management Act, 1999 B-BBEE Broad-Based Black Economic (Act No. 1 of 1999) Empowerment PMS Performance Management System CAE Chief Audit Executive POC Procurement Oversight Committee CAP Corrective Action Plan PPL Private Pilot’s Licence CAPSCA Collaborative Arrangement for the PSC Passenger Safety Charge Prevention and Management of RAASA Recreational Aviation Administration Public Health Events in Civil Aviation of South Africa CAR Civil Aviation Regulation ROC RPAS Operator’s Certificate CARCom Civil Aviation Regulations Committee RPAS Remotely Piloted Aircraft Systems CASSOA Civil Aviation Safety and Security SAA South African Airways Oversight Agency SACAA South African Civil Aviation Authority CATS Civil Aviation Technical Standards SADC Southern African Development Community C-FARP Cross-Functional Accident Reduction Plan SARPs Standards and Recommended Practices CORSIA Carbon Offsetting and Reduction Scheme SASO SADC Aviation Safety Organisation for International Aviation SCM Supply Chain Management DCA Director of Civil Aviation SMS Safety Management System DoA Delegation of Authority STE Short-Term Expert DoT Department of Transport SWOT Strengths, Weaknesses, Opportunities, EBS Enterprise Business System and Threats EI Effective Implementation TCA Type Certified Aircraft ESAF Eastern and Southern Africa ToR Terms of Reference ESWACAA Eswatini Civil Aviation Authority TR Treasury Regulations ExCo Executive Management Committee USOAP Universal Safety Oversight Audit FAA Federal Aviation Administration Programme FIU Flight Inspection Unit USAP Universal Security Audit Programme FSTD Flight Simulation Training Devices
2 Annual Report 2018 | 2019 PART A - General Information PART A General Information List of Diagrams, Graphs, Figures and Tables
Diagrams/Figures/Graphs
Diagram 01: ICAO Safety and Security Critical Elements page 12 Graph 01: Passenger Safety Charge figures between 2014/2015 – 2018/2019 page 20 Figure 01: The number of South African female pilots with an ATPL for fixed-wing aeroplane page 21 Figure 02: The number of South African male pilots with an ATPL for fixed-wing aeroplane page 21 Graph 02: Organisational performance comparison over a seven-year period page 36 Graph 03: Number of aircraft accidents: a three-year comparison page 39 Graph 04: Number of fatal aircraft accidents: a three-year comparison page 39 Graph 05: A three-year comparison of fatalities page 40 Graph 06: A three-year comparison of serious incidents page 40 Diagram 02: Schools awareness programme page 81-83 Figure 03: Skills development cost page 89 Diagram 03: Reasons for staff exits page 92 Figure 04: Misconduct and disciplinary action page 92
Tables
Table 01: Summary of aircraft accidents per aircraft category page 07 Table 02: Demographics of licensed aviation personnel by trade page 22 Table 03: Aircraft type: three-year comparison page 23 Table 04: Type certified versus non-type certified aircraft: seven-year comparison page 24 Table 05: Punitive measures against non-compliance page 25 Table 06: Performance information for the period of 01 April 2018 - 31 March 2019 page 26-35 Table 07: Organisational highlights page 37 Table 08: Aircraft accidents per aircraft category page 38 Table 09: Aviation Safety Operations MOSP 2018/2019 page 41 Table 10: Aviation Safety Operations MOSP 2018/2019 – deviation explanation page 42 Table 11: Aviation Security MOSP 2018/2019 page 43 Table 12: Aviation Security MOSP 2018/2019 – deviation explanation page 43 Table 13: Aviation Infrastructure MOSP 2018/2019 page 44 Table 14: Aviation Infrastructure MOSP 2018/2019 – deviation explanation page 44 Table 15: Stakeholder engagement activities page 48 Table 16: Regional technical assistance and cooperation missions page 49 Table 17: SACAA revenue collection page 50 Table 18: A snapshot of the SACAA’s application of The King IV™ Principle page 53-55 Table 19: Board Composition page 66 Table 20: Board and Board Committee meetings page 68-69 Table 21: Board remuneration page 70 Table 22: Risk register page 71 Table 23: Combined Assurance Implementation page 74 Table 24: Two-year comparison of reported injuries on duty page 77 Table 25: Personnel cost by Division page 88 Table 26: Personnel cost by salary band/level page 88 Table 27: Performance rewards by salary band/level page 89 Table 28: Training costs per Division page 90 Table 29: Employment and vacancies per Division page 91 Table 30: Employment changes per salary band/level page 91 Table 31: Employment equity status - male page 93 Table 32: Employment equity status - female page 94 Table 33: Employment equity status - disabled staff page 95
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The SACAA reviews its organisational performance quarterly Foreword by the against its Strategic Plan, from which the APP is developed. The APP is signed annually, with our Executive Authority, the Minister of Transport. Each quarter a report outlining progress against set Chairperson targets is submitted to the Executive Authority. The information contained in this report is gathered from those quarterly reports, therefore ensuring consistency and reliability of information. In line with the relevant prescripts, the annual report is submitted to the Executive Authority, the Auditor-General of South Africa (AGSA) as well as other key stakeholders at the end of August of each year. It is hoped that through this annual report, the SACAA is able to adequately share its substantive and exciting achievements of the past financial year, thereby ensuring transparency and an increased understanding of the SACAA’s role and contribution to our country’s socio-economic activities. Most significantly, the annual report is duly audited by the AGSA to ensure the consistency, reliability and accuracy of the information reported. It is also significant to point out that the report is also tabled in Parliament. Overview of the year
It is an exciting time to be Chairperson of the Board, this being my first report, as well as this being the penultimate report of the SACAA’s Strategic Plan, which spans five years, i.e. from 2015/2016 – 2019/2020. We have delivered sterling operational and financial results during the year, and it is my pleasure to inform our stakeholders about some of the highlights.
It is elating to report that the SACAA has upheld the expected corporate governance ethos; and as a result, secured an unqualified audit opinion. This remarkable performance should Mr Ernest Khosa not be celebrated in isolation, because the SACAA’s objectives are aligned to those of the Department of Transport, which are in turn, tied to the National Development Plan Vision 2030 (NDP). Introduction Ultimately, the SACAA’s achievements translate into South Africa’s success. I am delighted to present the 2018/2019 Annual Report on behalf of the newly appointed Board. The year under review has been Compliance with international standards encouraging, to say the least, albeit in challenging economic times. I am proud to affirm that the South African Civil Aviation Authority The Republic of South Africa is a signatory to the Convention on (SACAA) has continued to perform exceptionally well during the International Civil Aviation of 1944 (Chicago Convention), which year, having attained a hundred percent (100%) performance led to the establishment of a United Nations’ specialised agency, against targets set in the 2018/2019 Annual Performance Plan the International Civil Aviation Organization (ICAO). (APP), and excelling on some as elucidated more fully in this report. The ICAO is responsible for standardising and administering the As the SACAA, we have focused ourselves strongly on the safety and security of civil aviation operations across the world; execution of the strategic objectives and have demonstrated with the expectation that Member States will comply with the set dedication to improving the demographics of the aviation industry Standards and Recommended Practices (SARPs). The adoption in terms of transformation, as well as strengthening the regulator’s and implementation of the SARPs ensures that local civil aviation reputation as a whole. The entire organisation has emulated a regulations, and in turn operations, conform to global norms, thus harmonious culture of togetherness, growth and continuous enabling the global aviation network to operate reliably, safely and improvement. We are aiming our sights on an organisation that securely. will be agile in its pursuit of perfection, sound governance, and excellence whilst executing its core mandate. The ICAO regularly performs mandatory audits on Member States to assess whether the critical elements of the safety and Aviation, as an industry, is a critical one in contributing to the security oversight systems have been effectively and consistently overall Gross Domestic Product (GDP) of any country. Safe implemented. The results of the audit, which are measured through travel, regular audits, and zero tolerance for non-compliance to Effective Implementation (EI) ratings, equip the Member State regulations is what propels the SACAA in executing its mandate. with guidelines and guidance on areas that require improvement. Through our rigorous and tireless efforts, we are contributing to the economic growth of South Africa.
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There are eight (8) critical elements governing each of the two (2) Stakeholder engagements and relationships major civil aviation oversight systems; and these are: • Safety, which is audited by ICAO under the Universal Safety In the last two (2) years the SACAA has focused on centralising Oversight Audit Programme (USOAP) Continuous Monitoring communication, sharing information, building relationships, and Approach (CMA); and cooperation between the SACAA and all stakeholders. The year under review allowed us to fulfil this goal through various • Security, which is audited by ICAO under the Universal stakeholder engagement activities, which led to topics of great Security Audit Programme - Continuous Monitoring Approach importance being discussed amongst the top thought leaders in (USAP-CMA). the industry. Over the years, South Africa’s Effective Implementation has been Strategic outlook improving. Following an audit undertaken in 2007, South Africa achieved a rating of 77.1%. Another audit was conducted in July As one of the leading aviation and regulatory authorities on the 2013, resulting in South Africa attaining an EI of 83.83%. The continent, we are continuously looking at how to enhance and most recent audit took place in 2017, and this pushed up South optimise our performance, both operationally and financially. From Africa’s rating to 87.41%. The current and previous ratings are a financial perspective we are constantly looking at broadening significantly higher than the world average of 60%. our income streams. The safety and security of all aviators and their passengers will continue to be at the core of our operations. A key focus of the SACAA during this reporting period was the implementation of South Africa’s Corrective Action Plan (CAP) in Conclusion relation to the ICAO’s USOAP-CMA results. The implementation of South Africa’s Corrective Action Plans, as at the end of the When considering that in the 2011/2012 period, we attained a 74% financial year, was at 83.49%, while the SACAA-specific CAP performance rating, the fact that for the last four (4) years that implementation percentage was at 88%. When the Accident number has increased to 100%, coupled with receiving unqualified and Incident Investigation Division’s CAP is added to that of audit opinions over the years, our unwavering dedication to the the SACAA, the record stands at 84.62%, meaning that the success of the aviation industry is evident. SACAA’s APP target of 80% was exceeded. This movement in implementing the CAP is remarkable and indicates that the We will continue to work even harder to ensure that SACAA country’s commitment to aviation safety is indeed a top priority. solidifies its focus on the four good governance outcomes that are articulated in the King IV Report on Corporate Governance™ Inspiring continuity at management echelon (King IV Report™), namely; ethical culture, good performance, effective control and legitimacy. The Board will continue to monitor Our appointment as a new Board was not the only change that progress on the closure of all deficiencies that are identified by any took place during this reporting period; excitingly, Ms Poppy means, including the King IV™ gap analysis. Moreover, greater Khoza’s employment contract as Director of Civil Aviation (DCA) emphasis will continue to be placed on ethical leadership and was also renewed by the Minister of Transport for a further five (5) professionalism throughout the organisation, which are principles years, effective from 01 December 2018. that are intertwined with compliance to legal prescripts.
What is inspiring about the appointment of both the DCA and Board Last but not least, I wish to extend my gratitude to the previous is the element of continuity at the leadership level. Out of the seven Board and also welcome the incoming Board of Directors. (7) non-executive Board members, six (6) were reappointed from the Interim Board that held the fort for a period of six (6) months, Similarly, I would like to extend a warm SACAA welcome to our starting on 01 April 2018 and ending on 30 September 2018. The new Minister of Transport, Mr Fikile Mbalula, MP, and the Deputy reappointment of the DCA and most of the Board Members is, in Minister, Ms Dikeledi Magadzi, MP. We look forward to your my opinion, encouraging as it ensures that there is continuity at leadership, support, guidance and encouragement as we embark this level of leadership. I am also happy to report that there has on a new trajectory in the next five-year cycle. been ongoing stability at the level of the Executive team as the SACAA has managed to retain all its Executives. Our sincere thanks go to the former Minister, Dr Blade Nzimande, MP and the previous Deputy Minister of Transport, Ms Sindisiwe Insourcing of recreational aviation activities Chikunga, MP, for the unwavering support and distinctive leadership provided to the SACAA. In an effort to improve regulations and safety within the Recreational Aviation space, a decision was taken to insource all On behalf of the Board, I wish to thank each and every one of the the services of the Recreation Aviation Administration of South SACAA employees, starting with the Director of Civil Aviation, right Africa (RAASA). This process began in 2018, and I am pleased through to the most junior employee, for a remarkable job well done! to report that these changes became effective after the reporting period i.e., as of 01 April 2019. A transitional plan, with the aim of ensuring a smooth transition during the process, has been ______implemented successfully. Mr Ernest Khosa Chairperson: SACAA Board 31 August 2019
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We report a net operating surplus of R2.1 million for the period Overview by the Director ending 31 March 2019, against a budgeted surplus of R1.2 million. This has resulted in a positive variance of R0.9 million. of Civil Aviation Overview on aviation safety It is also worth emphasising that throughout the 2018/2019 financial year, the SACAA, as usual, carried out its mandate, without any form of fear or favour, to ensure that compliance to regulations is upheld by those it regulates. Every South African should be proud of the fact that our country’s remarkable record of compliance with global safety standards remains unbroken. In fact, our world-class safety and security oversight framework remains solid.
It is worth mentioning that South Africa has proudly maintained its zero accident record in the scheduled commercial operations (airlines), a record which is non-negotiable endeavour to keep for many years to come. As a general practice across the world the number of aircraft accidents, as well as related aviation incidents, are used as a measure to gauge the presence and effectiveness of a country’s oversight system over civil aviation operations.
It is very encouraging to note that the number of fatalities resulting from aircraft accidents in the general aviation sector continued to decline. This has been the case for the past few years. Statistics indicate that as at the end of March 2019, there were twenty (20) fatalities, which indicate a decrease by one fatality when compared to the 2017/2018 financial year. Further, the statistics indicate a decrease of ten (10) fatalities when compared to the 2016/2017 financial year.
Ms Poppy Khoza A review of statistics also indicates that a total of fifteen (15) fatal accidents were reported between 01 April 2018 and 31 March 2019. This translates into an increase of one (1) when Looking back, 2018/2019 has, once again, been a year of compared with the same period during the 2017/2018 financial promising financial and operational results, with this being the year. Nonetheless, this number is still remarkably better than fifth reporting period in which we have achieved 100% of our the total of eighteen (18) fatal accidents recorded during the Annual Performance Plan (APP). The APP is a binding contract, 2016/2017 financial year. signed annually between the entity and the Ministry of Transport, providing strategic and operational goals for the SACAA. While there is an improvement in terms of fatalities and fatal accidents, there was a slight increase in terms of the number This report, which has been scrutinised by the Auditor-General, of aviation accidents. A total of 86 accidents were reported reflects on the financial and operational performance ofthe between 01 April 2018 to 31 March 2019, which translates into SACAA for the financial year that ended on 31 March 2019. an increase of four when compared to the same period during the preceding year. It is crucial to note that unlike previous years, remotely piloted aircraft systems (RPAS), no matter their Healthy financial status size, have been added to the list. If RPAS are excluded, the total number of accidents drops down to eighty-three (83). The SACAA has achieved a healthy financial position, despite the prevailing difficult economic conditions; closing the year with a surplus that enables it to continue as a going concern for the foreseeable future, is a feat of which we are incredibly proud.
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Accident per aircraft category - 01 April 2018 to 31 March 2019 Aircraft category Commercial Private Training Unknown Total number Glider 0 1 0 0 1 Gyrocopter 0 2 1 0 3 Type-Certified Aircraft (helicopter) 4 11 1 0 16 Type-Certified Aircraft (fixed-wing) 4 23 6 0 33 Non-Type-Certified Aircraft (fixed-wing) 2 18 4 0 24 Non-Type-Certified Aircraft (helicopter) 2 2 0 0 4 Parachute 0 0 0 0 0 RPAS 2 2 0 0 4 Unregistered 0 0 0 1 1 Total 86 Table 1: Summary of aircraft accidents per aircraft category
In aviation there is absolutely no room for error, which further • On 24 May 2018, the SACAA suspended SA Express’ Air encouraged the SACAA and various stakeholders, working Operator Certificate (AOC) as well as the airline’s Aircraft together to ensure that South African skies remain safe. To Maintenance Organisation (AMO) approvals. In addition, achieve this objective, it applies a three-pronged approach. One the SACAA also suspended the Certificates of Airworthiness of the approaches entails auditing and certifying aviators and (CoA) of nine (9) of the twenty-one (21) aircraft registered aviation operations. The second approach entails encouraging and/or operated by the airline. The suspension was and reminding aviators about the importance of aviation safety necessitated by non-compliances that posed serious safety and security. The third approach focuses on applying punitive risks. measures against lawbreakers. • Following unsuccessful attempts to get CemAir to comply with licence conditions, the SACAA finally took a decision Three-pronged approach to halt the airline’s operations by suspending its Part 121 and 135 Air Operator Certificates (AOCs). The suspension became effective on 11 January 2019 and was necessitated by the SACAA’s concerns over the systemic failure of the airline’s maintenance controls. This was after an annual renewal audit revealed CemAir’s inability to prove the continued airworthiness of its fleet. • On 24 January 2019, the SACAA downgraded Mthatha Airport’s licence category from Level 4 to Level 3. This occurred after the SACAA had discovered some shortcomings relating to the airport’s rescue and fire- 1 2 3 fighting services as well as the aerodrome’s emergency management system. Encouraging Auditing and and reminding Focuses At the time of compiling this report, SA Express and Mthatha certifying aviators about on applying Airport were operating as per the norm, i.e. after they had aviators the importance punitive managed to satisfactorily address the SACAA’s concerns. On and aviation of aviation measures the other hand, CemAir remained grounded, and the SACAA operations safety and against was working together with the airline to try and guide it back into security lawbreakers full compliance. Overview on aviation security In an effort to preserve lives, the SACAA took punitive measures against some operators. The following is a summary of some The SACAA has started the process of getting South Africa ready of the key measures that the SACAA took against non- for the ICAO’s Universal Security Audit Programme Continuous compliances. Monitoring Approach (USAP-CMA). The objective of the USAP-
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CMA is to promote global aviation security through continuous Programme was launched with emphasis placed on the monitoring of Member States’ aviation security performance, envisaged organisational culture that would be driven through in order to enhance their aviation security compliance and several key pillars, namely: leadership, client-centricity, oversight capabilities. performance excellence, empowerment, collaboration, communication, ethics and governance. A date to audit South Africa on its aviation security oversight activities has not been set as yet. Regardless, the SACAA has I am also pleased to report, and to have been one of the been implementing South Africa’s readiness plan. In this regard, witnesses to the strides made by the SACAA in putting a Peer Assessment (mock audit) exercise was conducted in emphasis on looking after, amongst others, the wellbeing, February 2019. The result of the Peer Assessment audit reflected compensation, career aspirations as well as talent development an improvement in the Effective Implementation level, as well of its employees. As the head of the institution, I had the as highlighting a number of areas requiring enhancement. opportunity to officially launch the organisation’s culture pillars Management has compiled a plan and has allocated the in January 2019, which marked the start of the SACAA’s requisite resources to address the identified inefficiencies. It Culture Harmonisation Programme. During the launch, the is expected that South Africa will be audited in 2020 after the pillars of our organisational culture, namely: leadership, ethics conclusion of administrative processes between ICAO and the and governance, client-centricity, performance excellence, Department of Transport. empowerment, communication, and collaboration were introduced. We used the remainder of the reporting period to Contribution to global discourse on key focus on communicating and unpacking the behaviours linked to the culture pillars as part of the change process towards civil aviation matters institutionalising the behaviours of the espoused culture. In my The 2018/2019 financial year is one of which the Regulator, opinion, the goal of looking after the needs of our employees, in and indeed the entire aviation community, can be proud. a holistic manner, is coming to fruition. As an example, the SACAA played a central role in ensuring that South Africa hosted the first-ever Global Aviation Gender Transformation Summit, attended by nearly 500 top-ranking representatives of governments and the aviation industry from across the world, As has been the case for decades, the number of Africans, including airlines, airports, and aircraft manufacturers. Coloureds, and Indians with technical licences remained significantly lower than those of their White counterparts, The gathering was held in Cape Town from 08 - 10 August 2018 particularly White males. Coloureds constitute the lowest and sought to provide a platform through which all relevant category of technical licence holders. As at the end of the stakeholders could jointly chart a new flight path that would financial year, there were thirty-four (34) aviators with hot-air bring about meaningful gender transformation and equality in balloon licences and in terms of demographics, thirty-one (31) aviation – not only in South Africa, but across the world. To this are White males and three (3) White females. In terms of the end a number of outcomes were agreed upon, and shall be highest pilot qualification, i.e, the Airline Transport Pilot’s Licence further tabled at ICAO during its 40th Assembly in September (ATPL) in the helicopter category, the numbers are alarming, as 2019. A communiqué was also adopted and published for all there are only three (3) African males, one (1) African female, ICAO member States to note and implement. The SACAA shall sixteen (16) White females, 269 White males, one (1) Indian continue to advance gender equality discussions in the aviation Male, and one (1) Coloured male. This means there were no industry in the next financial year. Indian or Coloured females with helicopter ATPL licences.
The summit, which was deemed to be a success by all This simply means that transformation remains the aviation stakeholders, was held in cooperation with the ICAO, a industry’s Achilles heel, and a game-changing intervention is United Nations agency responsible for managing civil aviation long overdue. Following the drafting of the National Aviation activities across the world, and the SACAA’s shareholder, Transformation Strategy by the SACAA, it is encouraging i.e. the Department of Transport. The summit also enjoyed that the Department of Transport has focused on the review support from the United Nations Educational, Scientific and and submission of the draft National Aviation Transformation Cultural Organization (UNESCO); South African Airways (SAA), Strategy (NATS) to Cabinet for approval. The NATS is earmarked Transport Canada, Air Traffic and Navigation Services (ATNS), as a game-changer that will facilitate a co-ordinated approach Boeing, Ethiopian Airlines, Airports Company South Africa to aviation transformation in the country. It is believed that the (ACSA), and Qatar Airways. NATS will not only provide a co-ordinated approach to aviation training, but also opportunities for previously marginalised Advancing human capital management societies in particular.
The SACAA continued to place emphasis on looking after In terms of SACAA transformation, the gender representation the wellbeing, career aspirations, and talent development of of the Board comprises 50% male and 50% female. Similarly, its employees. As at the end of the financial year, the Human the SACAA’s Executive Management Committee has a Resources Division had achieved 94.7% of the targets detailed good representation of women at 50% of what constitutes an in the organisation’s Human Resources Operational Plan. Executive Committee. This type of diversity, including that of Moreover, in January 2019 the SACAA’s Culture Harmonisation age, is key, as it harnesses knowledge, skills, qualifications, and overall career and life experience.
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Contributing to economic transformation industry safe and secure. These awards are set to continue into the fututre. In line with the organisation’s target, the SACAA managed to retain its Level 2 B-BBEE (Broad-Based Black Economic Recognising Team SACAA Empowerment) rating. In addition, and in an endeavour to contribute to economic transformation, 75.6% of the Team SACAA knows how to stand together, and to meet all organisation’s total procurement spend was by companies falling challenges head-on! It is this attitude that has enabled the under the B-BBEE definition. The 75.6% is much higher than the organisation to achieve what it has thus far. In essence, our organisation’s target of 65%. Out of the 75.6%, a total of 30% organisation depends on its human capital, which is characterised of the suppliers were businesses owned by Black women. The by a spirit of resilience. This is exactly what was needed in this organisation will work harder to increase the percentage and challenging financial year on which we are reporting. It is therefore participation of youth-owned businesses, who in this reporting important to regularly recognise the hard work that our staff put period, managed to get only three percent (3%) out of the 75.6%. into their daily duties. The Staff Awards are one of the ways that the organisation relays gratitude for outstanding work. Several Keeping an eye on the future employee-focused initiatives were adopted by the organisations, and one of the most important among these is the continued The 4th Industrial Revolution is no longer a theory, it is here. recognition of excellence. Our policies will continue to be reviewed Regulators need to reinvent themselves in order to accommodate to elevate the focus on our most valued asset, i.e. our staff. the pace of the changing world and aviation industry. In order to achieve these objectives and remain relevant, Regulators such Conclusion as the SACAA will need to continue implementing best-practice information and communication technology systems, as well as Finally, let me thank each and every staff member, from HR programmes that will consistently attract and sustain a high- Executives through to the most junior in our organisation, for the performing workforce, and retain the best talent. resilience and drive you showed in the last financial year. Your efforts continue to set us apart as an organisation that strives This reporting period has been one of the most busy and dynamic for excellence. As Team SACAA, always remember that our periods that we have experienced. We are in the last year of the efforts play an important part in the country’s socio-economic implementation of our five-year strategy; and going forward we development and growth, especially in matters of trade and will continue to ensure that our strategies are aligned with the tourism, which contribute to job creation and poverty alleviation. priorities of government, according to our prescribed mandate and the changes in the aviation industry globally. Moreover, our Allow me to also use this opportunity to convey special words new 5-year strategy development process also coincides with of gratitude to the previous Minister of Transport, Dr Bonginkosi the ICAO’s 40th Annual General Assembly in September and Nzimande, MP, the Deputy Minister, Ms Sindisiwe Chikunga, October 2019, which will also give us the opportunity to align MP, as well as the former Board of Directors for their unwavering our new strategy with the ICAO Assembly resolutions. support and responsive leadership during their tenures. I wish to welcome the new Director-General, Mr Alec Moemi, and also thank the then Acting Director-General and the entire staff of the Successful adoption of an integrated Department of Transport (DoT). information system I also want to take this opportunity on behalf of the SACAA One of the main targets to achieve in this reporting period was Management and staff, to extend a warm welcome to the the completion of the Enterprise Business System (EBS) in Minister of Transport, Mr Fikile Mbalula, MP, the Deputy Minister, order to achieve an integrated information (ICT) system for the Ms Dikeledi Magadzi, MP, the new Board of Directors chaired organisation and for the benefit of clients. I am happy to report by Mr Ernest Khosa; and to pledge Team SACAA’s unwavering that the EBS project was completed in line with the set target, support towards a common vision that will propel the SACAA to and with all the required modules successfully loaded and ready remain one of the best-performing State entities in South Africa. for utilisation. In addition, a closeout report was submitted to, and approved by the SACAA’s Executive Management Committee Yours sincerely, (ExCo).
Recognising industry excellence ______At any given second or minute there is an aircraft taking off or landing somewhere in the world. Moreover, every time an aircraft Ms Poppy Khoza takes off, the lives of people on board are in the hands of aviation Director of Civil Aviation professionals. The seamless nature of air transport belies the 31 August 2019 intricate processes involved in aviation operations. It was for this reason that the SACAA saw it fit to launch the inaugural Civil Aviation Industry Awards, which were held in November 2018. The awards were aimed at recognising deserving operators as well as aviation personnel doing outstanding work to keep our
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Statement of responsibility and confirmation of accuracy of the Annual Report
To the best of our knowledge and belief, we confirm the following:
All information and amounts disclosed in this Annual Report are consistent with the Annual Financial Statements audited by the Auditor-General of South Africa.
The Annual Report is complete, accurate and is free from any omissions.
The Annual Report has been prepared in accordance with the guidelines on annual reports as issued by the National Treasury.
The Annual Financial Statements (Part E) have been prepared in accordance with the Public Finance Management Act, 1999, as amended, and standards applicable to the SACAA.
The accounting authority is responsible for the preparation of the Annual Financial Statements and for the judgments made in this information.
The accounting authority is responsible for establishing and implementing a system of internal controls, which has been designed to provide reasonable assurance as to the integrity and reliability of the performance and human resources information, as well as the Annual Financial Statements.
The external auditors were engaged to express an independent opinion on the Annual Financial Statements.
In our opinion, the Annual Report is a fair reflection of the operations, performance information, human resources information and the financial affairs of the SACAA for the financial year ended 31 March 2019.
Yours faithfully,
______Mr Ernest Khosa Ms Poppy Khoza Chairperson: SACAA Board Director of Civil Aviation
10 Annual Report 2018 | 2019 PART A - General Information PART A General Information
Strategic overview
To regulate civil aviation safety and security in support of the sustainable development of the Mission aviation industry.
Ranked among the Top 10 civil aviation authorities Vision globally by 2020.
The brand promise remains – Brand Promise “Keeping you safe in the sky”.
Values
Value Attributes
Good is never good enough. Always giving your best effort and seeking to continuously improve.
Integrity and independence. Maintain high ethical standards and approach issues professionally with integrity, without any bias and in a transparent manner that engenders trust amongst all our stakeholders.
Service excellence. Service delivery ahead of customer expectation, striving to always exceed customer expectations.
Teamwork and partnerships. Working with others and taking joint accountability for the end result.
Annual Report 2018 | 2019 11 PART A PART PART A - General Information General Information General
Legislative and oversight mandate The Republic of South Africa is a signatory to the Convention on by the Minister of Transport. The Board is expected to retain International Civil Aviation of 1944 (Chicago Convention), which full and effective control over the governance of the SACAA; led to the establishment of a United Nations specialised body, and in this regard, a clear division of responsibility exists at the International Civil Aviation Organization (ICAO). The ICAO Board and Executive Management level. It has delegated some is responsible for standardising and administering the safety of its powers to the Director of Civil Aviation and the SACAA’s and security of civil aviation operations across the world. Executive Committee through a Delegation of Authority (DoA) framework. The DoA, however, does not absolve the Board of The SACAA is a juristic person, established in terms of the Civil its responsibilities and accountability. Aviation Authority Act, 2009 (Act No 13 of 2009). The SACAA’s mandate is to administer civil aviation safety and security The DCA is responsible for the administration and management oversight in the Republic of South Africa, in line with the Civil of the day-to-day affairs as well as the staff of the SACAA. In Aviation Act (the Act), and in accordance with the standards and addition, the DCA is also responsible for the SACAA’s regulatory/ recommended practices (SARPs) prescribed by the ICAO. oversight functions of civil aviation safety and security operations. In relation to this particular responsibility, the DCA reports to the The SACAA, as prescribed by the Civil Aviation Act as well as Minister of Transport. the Public Finance Management Act, 1999 (Act No.1 of 1999) (PFMA), is a Schedule 3A entity, and is governed and controlled There are eight (8) critical elements governing each of the two by a Board of Directors (the Board) that serves as the accounting (2) major civil aviation oversight pillars, i.e. safety and security. authority. In turn, the Board is accountable to the Minister of Safety framework is audited by ICAO under the Universal Safety Transport who is the Executive Authority. Oversight Audit Programme (USOAP) Continuous Monitoring Approach (CMA), while the security element is audited under the The Board comprises seven non-executive members, as well as Universal Security Audit Programme - Continuous Monitoring the Director of Civil Aviation (DCA), all of whom are appointed Approach (USAP-CMA).
ICAO Safety and Aviation Security Appropriate Eight Critical Legislation Safety Elements Security Eight Authority Critical Elements Eight Critical Security (CE) Elements AviationState System Civil and Safety Oversight
Functions Programme and Primary Aviation Legislation Guidance, Tools Regulations and the Provision of and Info CE3 Guidance, Tools CE1 Safety Checklist Technical
CE5
CE2 Regulations
Specific Operating
Technical Personnel Qualifications and CE4
Training CE7
Surveillance CE6 Obligations CE8 Quality Control Personnel Certification and Obligations Qualification Approval Obligations and Training Resolution of Safety Concerns
Certification and Resolution of Safety Approval Obligations Concerns
Diagram 1: ICAO Safety and Security Critical Elements
12 Annual Report 2018 | 2019 PART A - General Information PART A General Information Corporate Services Corporate Human Resources
Minister of Transport Minister of Transport Positions perform a Governance and Board support role Board and Committee Executive Management Committee Members of the SACAA’s Direct functional reporting Administrative reporting Governance reporting Regulatory oversight Divisions tasked with Independent Mandates Compliance Legal and Aviation Legal and Aviation Investigations Accident and Incident Finance Audit and Risk Committee Chief Audit Executive Aviation Security Aviation Board of Directors Minister of Transport Minister of Transport
Director of Civil Aviation Director of Civil Operations Aviation Safety Aviation Flight Inspection Unit Aviation Aviation Company Secretary Infrastructure Organisational high-level structure
Annual Report 2018 | 2019 13 PART A PART PART A - General Information General Information General
Board composition (31 March 2019)
Mr Ernest Khosa Ms Poppy Khoza Dr Brian Suckling Chairperson of the Board Director of Civil Aviation
Prof. Ntombizozuko Ms Bulelwa Koyana Mr Surendra Sooklal Dyani-Mhango
Ms Nivashnee Naraindath Mr Mongezi India Ms Tshitshi Phewa Company Secretary
14 Annual Report 2018 | 2019 PART A - General Information PART A General Information
Executive Management Committee (31 March 2019)
Ms Poppy Khoza Mr Luvuyo Gqeke Mr Asruf Seedat # Ms Babalwa Ndandani Executive: Legal and Director of Civil Aviation Executive: Aviation Security Executive: Finance Aviation Compliance (Acting)
Mr Simon Segwabe Ms Phindiwe Gwebu Mr Gawie Bestbier Ms Thobile Masooa Executive: Aviation Executive: Corporate Executive: Aviation Executive: Human Safety Operations Services Infrastructure Resources
### Mr Peter Mashaba ## Mr Phila Kewana Ms Nivashnee Naraindath Executive: Accident and Chief Audit Executive Company Secretary Incident Investigations
# Ms Ndandani is holding the fort in the absence of Ms Mmanare Mamabolo who has been seconded to the Department of Transport. ## The Chief Audit Executive performs a Governance and Board support role. ### The Executive: Accident and Incident investigations heads the Accident and Incident Investigations Division, which administratively reports to the DCA, and functionally to the Department of Transport.
Annual Report 2018 | 2019 15 PART Performance Information PART B - Performance Information PART A General Information
Statement of responsibility for performance information and confirmation of accuracy for the year ended 31 March 2019
In line with applicable regulatory prescripts, the DCA is responsible for the preparation of the SACAA’s performance information and for judgments made in this report. In addition, the DCA is responsible for establishing and implementing a system of internal control designed to provide reasonable assurance relating to the integrity and reliability of the outlined performance information.
In my opinion, the performance information outlined in this report fairly reflects the actual achievements against planned objectives, indicators, and targets as per the strategic and annual performance plans of the SACAA for the year ended 31 March 2019.
The SACAA’s performance information for the year ended 31 March 2019 has been audited by the Auditor-General of South Africa (AGSA) with no unresolved audit findings. The AGSA’s report is presented on pages 98 - 101 of this document.
The performance information of the SACAA, set out from page 19 to page 50, was approved by the SACAA’s Board of Directors.
______Ms Poppy Khoza Director of Civil Aviation 31 August 2019
Annual Report 2018 | 2019 17 PART A PART PART B - Performance Information General Information General
Auditor’s report: predetermined objectives
The Auditor-General of South Africa (AGSA) carried out the necessary audit procedures on the performance information to provide reasonable assurance in the form of an audit conclusion. The audit conclusion on the performance against predetermined objectives is included in the AGSA’s report to Management. The AGSA identified material misstatements in the annual performance report submitted for auditing. These material misstatements were on the reported performance information of Goal 1: regulate the aviation industry effectively and efficiently. Management subsequently corrected the misstatements, and the AGSA did not raise any material findings on the usefulness and reliability of the reported performance information in the Annual Report on other legal and regulatory requirements section of the auditor’s report.
Refer to pages 98 - 101 for the Auditor’s Report, published as Part E: Financial information.
18 Annual Report 2018 | 2019 PART B - Performance Information PART A General Information
Situational and performance analysis
The SACAA’s performance against targets delineated in its The total passenger numbers for the 2018/2019 period 2018/2019 Annual Performance Plan (APP) is narrated in this amounted to 22 543 967, compared to the budgeted amount of part of the report. The SACAA’s 2018/2019 APP is drawn from 22 836 811. This is 1.3% lower than the budget, and 1% higher the SACAA’s 2015-2020 Strategic Plan. This section of the than the same period, last year. Of concern is that the growth report also provides a comprehensive analysis of internal and in passenger numbers for the current year is below budget and external factors that had an impact on the SACAA’s ability to substantially down on the growth experienced in the previous fulfil its mandate and reach the set annual targets. three financial years of 9.1% (2015/2016), 4.5% (2016/2017) and 4.7% (2017/2018).
Economic viability of the aviation industry Regular PSC audits are conducted by the SACAA revenue officials to ensure compliance by airlines and to strengthen Annual passenger numbers in relation to the relations between the Authority and the airline industry. Airlines Passenger Safety Charge earmarked for audits are selected by using a risk-based, annual audit plan. Larger airlines and airlines where previous problems The SACAA is a self-funded public entity that relies on a were encountered are visited more frequently. Regulations combination of revenue streams to fulfil its mandate and require all airports to submit monthly passenger numbers to business operations. The revenue streams consist of mainly the SACAA, which are then compared with the declarations the Passenger Safety Charge (PSC), User Fees, Fuel Levy, received from the airlines. Substantial, unexplained variances as well as a grant earmarked for the investigation of aircraft on numbers supplied by the airports and those from the airline accidents and incidents. Over 75.7% of the SACAA’s total are examined during the audit process. revenue is derived from the PSC, and hence the organisation pays attention to industry developments that may have an User Fees impact on passenger movements and related numbers. In 14.2% PSC accounts February 2019, the Minister of Transport, with the concurrence of 75.7% the Minister of Finance, approved an annual increase of 5.3% on Fuel Levy the PSC for 2019; bringing the amount to R24.86 per ticket. The 3.6% amended regulations were published in the Government Gazette Department and became effective from 01 May 2019. 3.1% of Transport financial (DoT) year lower than 3.4% Other Income figures the budget 1.3% 2018/2019 total passenger higher 22 543 967 than last budgeted amount 1.0% year 22 836 811
passenger growth A review of the 2018/2019 financial year figures indicates that the PSC accounts for 75.7% of total revenue, User Fees 14.2%, Fuel Levy 3.6%, the grant from the Department of Transport 2015/2016 (DoT) was 3.1%, and Other Income 3.4%. These percentages 9.1% are fairly constant when compared to previous years. As the PSC is the biggest contributor to the revenue, the passenger numbers will have a major impact on financial performance, and 2016/2017 4.5% these numbers are closely monitored on a monthly basis. The SACAA invoices the PSC one month in arrears to allow for information received from airlines to be processed, thus the 2017/2018 4.7% actual passenger numbers reflected in the next graph are also a month in arrears. Monthly provision is being made for the arrear billing. The next graph provides an analysis of the passenger 2018/2019 1.0% numbers for the last five years.
Annual Report 2018 | 2019 19 PART A PART PART B - Performance Information General Information General
Passenger numbers Comparison of scheduled passengers invoiced April 2014 to March 2019 (invoicing is done month after passengers have flown)
2.2
2.1 Millions 2.0
1.9
1.8
1.7
1.6
Pax Numbers 1.5
1.4
1.3
1.2 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
2014/2015 2015/2016 2016/2017 2017/2018 2018/2019
Graph 01: Passenger Safety Charge figures between 2014/2015 – 2018/2019
Key industry developments (FAA) took a decision to ground all the Boeing 737 MAX 8 and nine (9) aircraft worldwide. At the time of compiling this Boeing 737 MAX 8 report, the grounding was still in place. Following the tragic Ethiopian Airlines crash shortly after take- CemAir operations suspended by the SACAA off in Addis Ababa on 10 March 2019, the safety of the Boeing 737 MAX 8 aircraft was brought into question. Ethiopian Airlines CemAir operations were suspended by the SACAA in January Flight 302 crashed six minutes after take-off. Tragically, none 2019 due to a non-compliance that posed serious safety risks. of the 157 people on board survived. The aircraft was less At the time of compiling this report, CemAir’s Air Operator than four months old. A similar aircraft, operated by Lion Air in Certificate (AOC) had expired and the renewal process was still Indonesia, crashed on 29 October 2018, just 12 minutes after under way. take-off. Similarly, none of the 189 people on board survived the crash. SA Express resumes operations
Following the Ethiopian Airlines Flight 302 accident, the Following the suspension of SA Express on 24 May 2018, all SACAA initiated dialogue with both Comair and Boeing. operations were resumed in August 2018. The SACAA had Comair is the only operator utilising the Boeing 737 MAX suspended the airline’s Air Operator Certificate (AOC), Aircraft 8 in South Africa. Following these deliberations, Comair Maintenance Organisation (AMO) approval, and nine (9) decided to voluntarily ground what was then their sole Boeing Certificates of Airworthiness (CoA), due to non-compliances that 737 MAX 8 aircraft. The SACAA supported Comair’s self- posed serious safety risks. Based on the Corrective Action Plan grounding which was taken as a precautionary measure. Soon that was approved by the SACAA, the airline’s AMO and AOCs thereafter, the United States’ Federal Aviation Administration were subsequently re-issued.
20 Annual Report 2018 | 2019 PART B - Performance Information PART A General Information
Comair year-end results released As has been the case for decades, the number of Africans, Coloureds, and Indians remained significantly lower than those Comair announced their year-end results for the period of their White counterparts, particularly White males. Coloureds ending 30 June 2018. The company indicated that they had constitute the lowest category of technical licence holders. As at experienced a 4% increase in passenger volumes during their the end of the financial year, there were 34 aviators with hot-air financial year. Comair further indicated that seat occupancy balloon licences and in terms of demographics, 31 are White remained constant at 76%, which is below the average global males and three (3) White females. In relation to the highest industry seat occupancy ratio of 80.6%. pilot qualification, i.e. Airline Transport Pilot’s Licence (ATPL), in the helicopter category for example, there were three (3) Personnel licence statistics African males, one (1) African female, 16 White females, 269 White males, one (1) Indian Male, and one (1) Coloured male. Demographics of aviation personnel by licence This means there were no Indian or Coloured females with a helicopter ATPL licence. category By the end of March 2019, the number of South African A breakdown of gender statistics for fixed-wing or aeroplane personnel with technical licences was 20 791. This number ATPL, which is the highest pilot qualification, is delineated in excludes those that hold cabin crew and remote pilot’s licences. the charts below:
9 5 6 88 38 58
Females
Male
208
2958
African African Coloured Coloured Indian Indian White White
Figure 01: The number of South African female pilots with Figure 02: The number of South African male pilots with an ATPL for fixed-wing aeroplane an ATPL for fixed-wing aeroplane
Annual Report 2018 | 2019 21 PART A PART PART B - Performance Information General Information General
The next table provides a detailed background of the demographics of licensed aviation personnel by trade.
Demographics of licensed aviation personnel by trade
Student Pilot (Active Licences) 562 61 1 540 86 2 249 839
Private Pilot - Aeroplane 453 84 6 077 113 6 727 1 764
Private Pilot - Helicopter 66 10 1 781 18 1 875 392
Commercial Pilot - Aeroplane 224 39 2 772 85 3 120 2 025
Commercial - Helicopter 41 12 860 9 922 175
Airline Transport (Aeroplane) 97 43 3 166 64 3 370 299
Airline Transport (Helicopter) 4 1 285 1 291 16
Aircraft Maintenance Engineers 347 43 1 800 47 2 237 170
Cabin Crew 2 561 610 1 053 263 4 487 259
Total 5 802 903 19 334 686 25 278 5 939
Table 02: Demographics of licensed aviation personnel by trade
South African African White Total South African Total Foreign Nationals Coloured Indian
22 Annual Report 2018 | 2019 PART B - Performance Information PART A General Information
Review of the South African Aircraft Register As depicted in the next table, at the end of this review period, there were 14 005 aircraft on the South African Aircraft Register. In terms of conventional aircraft, the highest growth was witnessed in the helicopter category with an increase of 4.9%, followed by turbojets with 2.6%. A miniscule increase of 1.8% was also recorded in relation to piston engines. As expected, the number of remotely piloted aircraft systems continued to increase, recording almost 40%.
Aircraft type statistics: three-year comparison
Piston engines Helicopters 31 Mar 2017 3 804 31 Mar 2017 1 318 31 Mar 2018 3 823 31 Mar 2018 1 357 31 Mar 2019 3 893 31 Mar 2019 1 424
% growth % growth between 2018 between 2018 and 2019 1.8% and 2019 4.9%
Turboprop Recreational 31 Mar 2017 534 31 Mar 2017 6 287 31 Mar 2018 552 31 Mar 2018 6 332 31 Mar 2019 685 31 Mar 2019 6 386
% growth % growth between 2018 between 2018 and 2019 24% and 2019 0.8%
Turbojet Remotely Piloted 31 Mar 2017 522 Aircraft Systems 31 Mar 2017 517 31 Mar 2018 521 31 Mar 2018 796 31 Mar 2019 535 31 Mar 2019 1 082 % growth between 2018 % growth and 2019 2.6% between 2018 and 2019 35.9%
31 March 2017 31 March 2018 31 March 2019 % growth between 2018 and 2019 Total 12 982 13 381 14 005 4,6%
Table 03: Aircraft type: three-year comparison
Annual Report 2018 | 2019 23 PART A PART PART B - Performance Information General Information General
Review of Type and Non-Type Certified Aircraft
Aeroplanes consist of two (2) categories: Type Certified Aircraft (TCA) and Non-Type-Certified Aircraft (NTCA). NTCA are regarded as experimental aircraft. TCA are typically used for commercial activities, are regulated under stricter conditions and require a more intense approval process.
On the other hand, NTCAs are given what is referred to as an ‘authority to fly’. The maintenance of type certified aircraft is strictly controlled and is regulated through aircraft maintenance organisations, whereas maintenance matters regarding non-type certified aircraft are less stringent. In order to monitor trends, the SACAA keeps a register and statistics, as outlined in the next table, in relation to these two types of aeroplanes.
Type Certified Aircraft versus Non-Type Certified Aircraft: seven-year comparison
5 914 5 994 6 053 6 126 6 165 6 253 6 318 5 889 5 992 6 106 6 203 6 293 7 128 7 338 11 803 11 986 12 159 12 589 12 936 13 381 13 656 50.1% 50.0% 49.8% 48.7% 47.7% 46.7% 46.27%
31 March 31 March 31 March 31 March 31 March 31 March 31 March 2013 2014 2015 2016 2017 2018 2019
Type Certified Aircraft Non-Type Certified Aircraft Total Number of Aircraft % of Type Certified
Table 04: Type certified versus Non-Type Certified aircraft: seven-year comparison
Legislation and regulation developments
Amendment of the Civil Aviation Act The Bill was tabled at the National Economic Development and Labour Council (NEDLAC) for consideration and approval. NEDLAC formed a Task Team to scrutinise the Bill in depth. The Task Team met on 11 July and on 3 August 2017. In the meetings, the Task Team reviewed all the provisions of the Bill and made some changes in certain provisions.
One of the substantive changes relate to the change of the title of the ‘DCA’ to that of the ‘CEO’. The Task Team had a problem with this change on the basis that, in the South African context, a CEO reports fully to a Board on all the operations of the organisation. In the SACAA’s case, however, the DCA reports to the Minister on aviation safety and security matters. As a result of this, they proposed reverting to the title of ‘Commissioner of Civil Aviation’.
The other change is the insertion of a provision that requires the SACAA/DoT to promulgate levies and charges at least three or four months before the date of it coming into operation. This provision was once included in the Civil Aviation Regulations but was later removed. The business segment of NEDLAC required that it be inserted in the Act, especially because the recently drafted Air Traffic Navigation Services (ATNS) and Airports Company of South Africa (ACSA) Acts contain a similar provision.
The SACAA was advised that the Bill has been introduced to the National Assembly in Parliament for consideration.
24 Annual Report 2018 | 2019 PART B - Performance Information PART A General Information
Promulgated Civil Aviation Regulations These punitive actions were taken against all types of licence holders including: Cabin Crew, Aviation Training Organisation, During the reporting period, the following Civil Aviation Private Pilot Licence holder, Student Pilot Licence holder, Regulations (CAR) were promulgated. Commercial Pilot licence holder, Remote Piloted Aircraft System operators, Airline Transport licence holder, National Pilot Licence • The Nineteenth Amendment of the Civil Aviation holder, Air Operator Certificate licence holders, Aviation Training Regulations, which contained proposals approved by Instructor, Helipad operator, as well as Aerodrome Operators. the Civil Aviation Regulations Committee (CARcom) in its meetings of September 2017, November 2017 and February 2018, was approved by the Minister and was Strategic outcome-oriented goals promulgated and published in the Gazette on 21 September In compliance with the National Treasury guidelines on the 2018. The effective operational date of this Amendment development of strategies and annual performance plans for was 21 October 2018. Schedule 3A entities, the organisation conducted a situational • The Twentieth Amendment of the Civil Aviation Regulations, analysis exercise comprising a SWOT (strengths, weaknesses, which contained proposals approved by CARCom in opportunities and threats), a PESTLE (political, economic, its meetings of September 2018 and November 2018, social, technological, legal and environmental) and stakeholder was approved by the Minister and was promulgated and analyses to ensure relevance. The result was a slight adjustment published in the Gazette on 31 March 2019. The effective of the organisational goals, and a significant adjustment of operational date of this Amendment was 01 May 2019. objectives and targets. It was hoped that these changes would escalate the pace of service delivery.
In addition, the following Civil Aviation Technical Standards In revising the strategy and developing the 2018/2019 Annual (CATS) were promulgated during the reporting period. Performance Plan, the SACAA ensured alignment to, and support of the National Development Plan and Department of Transport • Amendment of Civil Aviation Technical Standards (SA- outcomes. Cognisance was also given to the national priorities as CATS 1/2018) relating to Part 47,61,66,67,141 and 171 articulated in various government platforms such as the State of were approved by the DCA and were promulgated on 01 the Nation Address by the President of the Republic and the Nine- March 2018 and published on the SACAA website. Point Plan. Even though not all the aspects of these interventions apply to the SACAA environment, ongoing progress reports are • Amendment of Civil Aviation Technical Standards (SA- shared with the shareholder where applicable. CATS 2/2018) relating to Parts, 61,67,121,127,135,139,171 and 178 were approved by the DCA and were promulgated on 21 October 2018 and published on the SACAA website. The SACAA’s 2018/2019 goals were as follows: • Amendment of Civil Aviation Technical Standards (SA-CATS 1. Regulate the aviation industry effectively and efficiently; 3/2018) relating to Parts, 61,67,93,121,127,128,135,145, 2. Increase the national footprint of regulatory services; 171 and 172 were approved by the DCA and were 3. Secure financial sustainability; promulgated on 06 December 2018 and published on the 4. Effective stakeholder management and regional SACAA website. cooperation; 5. Improve the client service experience; In relation to punitive measures against individuals and operators 6. Drive organisational system innovation; and that did not comply with rules, there were: 7. Enhance human capital and accelerate transformation.
Counselling Letters 11 Performance Information Warning Letters 16 As at the end of March 2019, the SACAA’s Performance Penalties 38 Information for the period 01 April 2018 – 31 March 2019 Suspensions 18 against the set objectives was 100%. This is subject to audit by the Auditor General. Remedial Training 4 Revocations 1 Cancellations 2 Aerodrome Level Licence Downgrade 1 Aircraft Grounding 20 Table 05: Punitive measures against non-compliance
Annual Report 2018 | 2019 25 PART A PART PART B - Performance Information General Information General
Status n/a Annual Actual 84.62% of was the CAP achieved by the end A of the FY. report was submitted to and approved by ExCo.
Quarter 4 Actual The closure of the SACAA specific Corrective Action Plan (CAP) was at 84.62% by the end of March 2019 as verified by the ICAO SACAA Compliance Section The (ICS). target was exceeded by The 4.62%. report was submitted and approved by ExCo. Achieved In Progress Not Achieved Not Applicable
Quarter 4 Target Implement 80% of USOAP CAP CMA and report to ExCo.
Quarter 3 Actual The USOAP CAP implementation status is currently at 60% as at the end of December report A 2018. was submitted to ExCo.
Quarter 3 Target Implement 60% of USOAP CAP CMA and report to ExCo.
Quarter 2 Actual CAP closure CAP is currently at 31% as verified by ICS.
Quarter 2 Target Implement 40% of USOAP CAP CMA and report to ExCo.
Quarter 1 Actual The CAP The CAP has been developed and 27% of is the CAP closed as verified by ICS.
Quarter 1 Target Implement 20% of USOAP CAP CMA and report to ExCo.
Performance Indicators SACAA SACAA specific CMA USOAP closed CAP and approved by ExCo.
Annual Target Implement 80% of the SACAA specific USOAP CAP CMA and report to ExCo.
Strategic Objective Achieve a step-change in regulating Aviation Safety and Security. 1
As at the end of March 2019, the SACAA’s Performance Information for the against the set objectives was 100%. period 01 April 2018 – 31 March 2019 No Performance Information Performance Information – 2018/2019 Table 06: Performance information for the period of 01 April 2018 - 31 March 2019 06: Performance information for the period of 01 Table
26 Annual Report 2018 | 2019 PART B - Performance Information PART A General Information
Status
Annual Status The Peer Assessment was CAP completed and approved by ExCo on 28 March 2019. 100% of the Examinations project plan actions were achieved by the end of the financial year. report was A submitted and approved by ExCo.
Quarter 4 Actual The USAP The USAP Peer CMA Assessment was completed in the final week of February 2019 and was a CAP submitted to ExCo for approval. ExCo approved the CAP. 100% of the Phase 1 examinations project plan was implemented by the end of the financial year and a close-out report was submitted to and approved by ExCo.
Quarter 4 Target Submit Final CAP USAP for ExCo approval. Implement 90% of the approved Examinations project plan and report to ExCo.
Quarter 3 Actual The self- assessment CAP implementation is progressing The Peerwell. Assessment did not take place in Q3. report on A the progress of the CAP and feedback on the Peer Assessment was submitted to ExCo. 60% of the examinations project plan has been achieved in this period and the report was submitted to ExCo.
Quarter 3 Target Develop a draft Peer USAP Assessment and CAP submit to ExCo for comments. Implement 60% of the approved Examinations project plan and report to ExCo.
Quarter 2 Actual The organisation engaged the ESAF office requesting ICAO accredited auditors to conduct the Peer Assessment. The Peer Assessment will now be undertaken in Q3. 40% of the Examinations project plan was achieved in Q2.
Quarter 2 Target Undergo the USAP Peer CMA Assessment. Implement 40% of the Examinations project plan and report to ExCo.
Quarter 1 Actual The readinessThe report was submitted and approved by ExCo. Project Plan is updated and 20% is implemented.
Quarter 1 Target Co nt i n ued State of Readiness report based on internal assessment submitted to ExCo. Implement 20% of the Examinations project plan and report to ExCo.
Performance Indicators ExCo approved Universal Security Audit Programme (USAP) CAP based on Peer Assessment Report. ExCo approved Examinations project plan im - plementation.
Annual Target Develop a Peer Assessment CMA USAP Corrective Action Plan (CAP) for ExCo approval. Implement 90% of Phase 1 Examinations project plan and report to ExCo.
Strategic Objective Achieve a step-change in regulating Aviation Safety and Security. Achieve a step-change in regulating Aviation Safety and Security. 2 No 3 Performance Information – 2018/2019 |
Annual Report 2018 | 2019 27 PART A PART PART B - Performance Information General Information General
Status
Annual Status The RPAS The RPAS Operations Monitoring System business case was developed and approved by ExCo the end of the FY. The Aviation Personnel Licencing Approach report was developed and submitted to ExCo. ExCo approved the report.
Quarter 4 Actual The final RPAS Operations Monitoring System Business case was presented to ExCo and was approved. Improved Personnel Licensing Approach was completed and the same was presented to ExCo and was approved during the 28 March 2019 ExCo.
Quarter 4 Target Submit Final business case to ExCo for approval. Submit final Improved Personnel Licensing approach to ExCo for approval.
Quarter 3 Actual A draft RPAS draft RPAS A business case was submitted to ExCo and was approved. The Personnel Licensing Approach second draft was submitted to ExCo and was approved.
Quarter 3 Target Develop draft business case and submit to ExCo for comments. Submit second draft of the improved Personnel Licensing approach to ExCo for comments.
Quarter 2 Actual Industry consultation was conducted during the quarter as required. Internal and external consultations have been conducted as required.
Quarter 2 Target Conduct Industry consultations and report to ExCo. Conduct consultations with internal and external stakeholders on the draft Improved Personnel Licensing approach and report to ExCo.
Quarter 1 Actual Consultation on the RPAS Operations Monitoring System took place during the quarter and the report was approved by ExCo. The draft improved Licensing Approach was submitted to ExCo and was approved draft. first a as
Quarter 1 Target Co nt i n ued Conduct Industry consultations and report to ExCo. Develop first draft of Improved Personnel Licensing Approach.
Performance Indicators ExCo approved business case for RPAS Operations Monitoring Systems. Improved Personnel Licensing Approach approved by ExCo.
Annual Target Develop a business case for RPAS Operations Monitoring Systems. Develop improved Aviation Personnel Licencing Approach and submit to Exco for approval.
Strategic Objective Achieve a step-change in regulating Aviation Safety and Security. Achieve a step-change in regulating Aviation Safety and Security. 4 No 5 PerformanceInformation | 2018/2019 –
28 Annual Report 2018 | 2019 PART B - Performance Information PART A General Information
Status
Annual Status 100% of the C-FARP implementation plan was achieved in full by the end of the FY. The close out report was approved by ExCo. 100% of the Safety Data Analysis project plan was implemented and a report was approved by ExCo on 28 March 2019.
Quarter 4 Actual 100% of the C-FARP targets were met and a final report was approved by ExCo. 100% of the Phase 1 Safety Data Analysis project plan targets were completed and a close out report was submitted to and approved by ExCo.
Quarter 4 Target 100% completion of C-FARP. Submit C-FARP Closing Report to ExCo for approval. Implement 100% of Phase 1 Safety Data Analysis project plan and report to ExCo.
Quarter 3 Actual All quarter 3 targets in the were CFARP implemented and a report was submitted to ExCo. The Safety Data Analysis progress report which showed the 75% implementation of the project was submitted to and approved by ExCo.
Quarter 3 Target Implement 75% progress of C-FARP and report to ExCo. Implement 75% of Phase 1 Safety Data Analysis project plan and report to ExCo.
Quarter 2 Actual All the Quarter 2 (50%) targets have been met as reported. 50% of the project plan was implemented in Q2.
Quarter 2 Target Implement 50% progress of C-FARP and report to ExCo. Implement 50% of Phase 1 Safety Data Analysis project plan and report to ExCo.
Quarter 1 Actual The year 3 targets have been revised and approved by ExCo. Development of the Project Plan was completed and approved by ExCo.
Quarter 1 Target Revise year 3 C-FARP plan and submit to ExCo for approval. Develop Safety Data Analysis project plan for approval by ExCo. Co nt i n ued
Performance Indicators Fully implemented C-FARP. Phase 1 of Safety Data Analysis project implementation completed.
Annual Target 100% implementation and of C-FARP report to ExCo Implement 100% of Phase 1 approved Safety Data Analysis project plan and report to ExCo.
Strategic Objective Revise and Implement and C-FARP align it to international best practice. Establish a platform to manage safety risk. 6 No 7 PerformanceInformation | 2018/2019 –
Annual Report 2018 | 2019 29 PART A PART PART B - Performance Information General Information General
Stauts Annual Status Annual Status
Annual 7 8 3 10 28 Status Quarter 4 S (A) 100% of the Security Data Analysis project plan was implemented and a report was submitted to and approved by ExCo. Actual 5 0 0 24 29
Quarter 4 R (A) Actual 6 5 3 13 27 All planned actions in the Security Data Analysis project plan were completed by the end of the financial A year. report was submitted to and approved by ExCo. Quarter 4 S (T) Target 6 0 0 26 Quarter 4 32 Target R (T) Implement 100% of Phase 1 Security Data Analysis project plan and report to ExCo. 8 8 2 13 31
Quarter 3 S (A) Actual 7 0 0 32 Quarter 3 39 Actual R (A) 8 5 2 The Security Data Analysis progress report which showed the 75% implementation of the project was submitted to and approved by ExCo. 10 25
Quarter 3 S (T) Target 7 0 0 30 Quarter 3 37 Target R (T) 3 1 6 Implement 75% of Phase 1 Security Data Analysis project plan and report to ExCo. 15 25 S (A) Quarter 2 against a target of 95% Achieved = 110% MOSP Total Actual 0 0 10 49 Quarter 2 59 Actual R (A) 6 0 4 15 25 Implementation of Phase 1 has commenced; the however, target has not been met. Quarter 2 S (T) Target 7 0 0 45 52
Quarter 2 R (T) Target 7 3 10 26 46 Implement 50% of Phase 1 Security Data Analysis project plan and report to ExCo. Quarter 1 S (A) Actual 8 0 0 29 Quarter 1 37 R (A) Actual Project plan submitted to ExCo and was approved. 9 4 3 15 31
Quarter 1 S (T) Quarter 1 Target Co nt i n ued 9 0 0 30 Target 39 R (T) Develop Security Data Analysis project plan for approval by ExCo. 28 24 64 14 130 Annual S (A) Performance Actual 29 14 53 Indicators 12 108 S (T) Phase 1 of Security Data Analysis project implementation completed. 0 0 30 134 164 Annual Annual R (A) Target 0 Target 0 29 131 160 R (T) Implement 100% Phase 1 approved Security Data Analysis project plan and report to ExCo.
Strategic Objective Strategic
Establish a platform manageto security risk. Objective 8 Annual Performance Plan Air Traffic Traffic Air Services Aerodrome Licence Inspections & Surveillance CNS Aviation Aviation Environmental Protection Total MOSP MOSP Total Activities No Performance Indicator – achieve a minimum of 95% against annual target PerformanceInformation | 2018/2019 – Infrastructure 9. Master Oversight and Surveillance Plan – Aviation
30 Annual Report 2018 | 2019 PART B - Performance Information PART A General Information
Annual Status Annual Status 3 1 0 0 3 3 46 30 86
Quarter 4 S (A) Actual 3 3 5 0 2 42 53 108 216 R (A) 1 4 6 3 1 24 12 14 65
Quarter 4 S (T) Target 5 4 0 4 60 68 31 123 295 R (T) 3 0 3 2 18 17 51 12 106 Quarter 3 S (A) Actual 5 0 3 48 14 10 13 129 222 R (A) 1 4 6 3 0 25 12 12 63
Quarter 3 S (T) Target 4 4 0 2 58 67 29 123 287 R (T) 4 5 0 4 3 27 36 68 147 Quarter 2 S (A) Actual 6 8 0 5 65 15 35 130 264 R (A) Total MOSP Achieved = 98% against a target of 95% MOSP Total 1 5 7 4 1 25 12 14 69
Quarter 2 S (T) Target 5 5 0 4 60 68 31 124 297 R (T) 2 2 0 3 3 25 33 50 118 Quarter 1 S (A) Actual 5 5 0 4 37 45 28 127 251 R (A) 1 4 6 3 1 25 12 14 66
Quarter 1 S (T) Target 5 4 0 4 Co nt i n ued 60 68 31 124 296 R (T) 0 12 87 11 19 13 116 199 457 S (A) Annual Actual 4 3 99 48 54 17 25 13 263 S (T) 0 19 77 28 14 494 192 129 953 R (A) Annual Target 0 19 17 14 494 238 271 122 R (T) 1 175
Strategic Objective Annual Performance Plan Aircraft Maintenance Organisation Manufacturing Organisation Air Operator Certificate Holders Aviation Aviation Training Organisations RPAS Operator RPAS Certificate Holders Flight Simulator Training Device Airports (Aviation Medicine) Design Organisations Total - MOSP - MOSP Total Activities Performance Indicator – achieve a minimum of 95% against annual target 10. Master Oversight and Surveillance Plan - Aviation Safety Operations 10. Master Oversight and Surveillance Plan - Aviation PerformanceInformation | 2018/2019 –
Annual Report 2018 | 2019 31 PART A PART PART B - Performance Information General Information General
Annual Status Annual Status 63 99 35 37 234
Quarter 4 S (A) Actual 5 2 29 70 106 R (A) 4 59 72 52 187 Quarter 4 S (T) Target 5 25 46 18 94 R (T) 49 98 61 30 238 Quarter 3 S (A) Actual 7 3 11 49 70 R (A) 49 82 64 12 207 Quarter 3 S (T) Target 3 11 15 40 69 R (T) 63 45 57 27 192 Quarter 2 S (A) Actual 6 5 41 41 93 R (A) Total MOSP achieved = 110% against a target of 95% achieved = 110% MOSP Total 54 47 61 14 176 Quarter 2 S (T) Target 3 10 51 43 107 R (T) 55 14 82 35 186 Quarter 1 S (A) Actual 5 8 68 42 123 R (A) 9 62 69 16 156 Quarter 1 S (T) Target 5 4 Co nt i n ued 76 45 130 R (T) 230 256 235 129 850 S (A) Annual Actual 46 224 210 246 726 S (T) 27 18 145 202 392 R (A) Annual Target 31 28 167 174 400 R (T)
Strategic Objective Annual Performance Plan Airports and Airlines Regulated Agents and Known Consignors Dangerous Goods Safety Oversight Training Training Organisations Total - MOSP - MOSP Total Activities Performance Indicator – achieve a minimum of 95% against annual target 11. Master Oversight and Surveillance Plan - Aviation Security 11. Master Oversight and Surveillance Plan - Aviation PerformanceInformation | 2018/2019 –
32 Annual Report 2018 | 2019 PART B - Performance Information PART A General Information
Status - - - Annual Status A cost A containment plan was approved by the DCA. Im - plementation of the plan was reported to and ap - proved by the DCA. The funding model project plan was de veloped and approved by ExCo The in Q1. organisation achieved 95% in the implemen tation of the project final A plan. report was approved by ExCo. 100% of the Phase 1 Decentralisa tion business case project plan was implemented. close-out A report was submitted to and approved by ExCo. -
Quarter 4 Actual 88,8% of the cost containment plan based on the NT instructions was implemented and the report was approved by the DCA. 95% of the targets in the funding model project plan were achieved by the end of March 2019. report was A submitted and approved by ExCo. The Decentral isation project has been implemented in full and therefore 100% of the targets A were met. close-out report was submitted for DCA’s signature and the same was submitted to and approved by ExCo.
Quarter 4 Target Implement 80% of the cost containment plan and report quarterly to the DCA. Implement 90% Funding Model project plan and report to ExCo. Implement 100% of Decentralisa - tion business case recom - mendations and report to ExCo quarterly. - Quarter 3 Actual 60% of CostNT containment instructions were implemented and a progress report was approved by the DCA. The Quarter 3 targets for the funding model were approved by ExCo and a report was submitted as per the quarterly target. The Decen tralisation progress report was submitted to ExCo and the 75% progress was approved.
Quarter 3 Target Implement 60% of the cost containment plan and report quarterly to DCA. Implement 60% Funding Model project plan and report to ExCo. Implement 75% of De - centralisation business case recommen - dations and ExCoto report quarterly.
Quarter 2 Actual 30% of Cost NT containment instructions were implemented and a progress report was approved by the DCA. SACAA has SACAA exceeded the target for the second quarter and has achieved 39%. 30% of the project activities have been completed. The project is running behind schedule.
Quarter 2 Target Implement 30% of the cost containment plan and quarterly report to the DCA. Implement 20% Funding Model project plan and report to ExCo. Implement 50% of De - centralisation business case recommen - dations and report to ExCo quarterly.
Quarter 1 Actual Cost containment plan was revised and approved by the DCA. The plan was developed and approved by ExCo. Only 10% of the Decen - tralisation business case was com - pleted during the reporting period.
Quarter 1 Target Co nt i n ued Revise Cost Containment Plan for approval by the DCA. Develop the Funding Model project plan for approval by ExCo. Implement 25% of De - centralisation business case recommen - dations and report to ExCo quarterly. - Performance - Indicators DCA ap - DCA proved Cost Contain - ment Plan. 90% Fund ing Model Project imple mentation completed. Implement Phase 1 of Decen - tralisation project.
Annual Target Develop and implement an annual cost containment plan as per instruction. NT Develop annual funding model project plan and implement 90% of the annual plan and report to ExCo. Implement 100% of Phase 1 Decentralisa - tion business case recom - mendations and report to ExCo.
Strategic Objective Establish a culture of prudent financial management. Diversify and expand sources of revenue. Establish optimum access to regulatory services. 14 13 No 12 PerformanceInformation | 2018/2019 –
Annual Report 2018 | 2019 33 PART A PART PART B - Performance Information General Information General
Status - - - Annual Status approved by ExCo. 97, 3% of the Stakeholder Management Plan was implemented and a report was submit - ted to and approved by ExCo. The Regional Cooperation Strategy and implemen tation plan was devel oped and approved by the Board on 26 March 2019. The Phase 2 of the was CMP reviewed and approved by ExCo in quarter 1. 93, 75% of the project was successfully Implement - report A ed. was submit - ted to and approved by ExCo. 100% of the EBS project was complet close A ed. out report was submit - ted to and
Quarter 4 - Actual - 97,3% of the SMP targets were achieved successfully. ExCo approved the final report. The Regional Cooperation Strategy and imple mentation plan was approved the Board. 93,75% of the CMP targets have been achieved and a report demonstrat - ing this is was submit - ted to and approved by ExCo. 100% EBS imple mentation has been achieved. Closeout report was submitted to and approved by ExCo. - - - - Quarter 4 Target Implement 90% of the and SMP report to ExCo. Submit Final Re gional Co operation Strategy and Imple mentation Plan to Board for approval. Implement 90% of the CMP Phase 2 Implemen tation plan and report to ExCo. Implement 100% of the EBS project roll- out plan and report progress to ExCo. -
Quarter 3 Actual The SMP The SMP implementation was at 68% by the end of the quarter. report was A submitted to ExCo. The Regional Cooperation Strategy and implementation plan was approved the Board. The CRM Change Management Programme has exceeded the target by report A 2, 5%. was submitted to ExCo. EBS was at 99% by the end of the quarter and a report demon strating this was submitted to ExCo and it was approved. - - Quarter 3 Target Implement 75% of the and SMP report to ExCo. Submit Final Regional Cooperation Strategy and Implemen tation Plan to Board for approval. Implement 60% of the Phase CMP 2 implemen tation plan and report to ExCo. Implement 95% EBS project plan and report progress to ExCo.
Quarter 2 Actual The organisation achieved 58% of the targets by the end of Q2. Conduct internal and external consultations and report progress to ExCo. The organisation achieved 31, 25% of the Change Management Plan deliverables in Q2. As at the end of September 2018 the project was 97% completed. - Quarter 2 Target Implement 45% of the and SMP report to ExCo. Conduct internal and external consultations and report progress to ExCo. Implement 40% of the Phase CMP 2 Implemen tation plan and report to ExCo. Implement 90% EBS project plan and report progress to ExCo.
Quarter 1 Actual The revised for SMP 2018/19 was presented to ExCo and was also approved. A Regional A Cooperation Strategy diagnostic report was developed and subsequently approved by ExCo. Phase 2 of was the CMP developed and subsequently approved by ExCo. EBS Imple - mentation currently at 92%. - Quarter 1 Target Co nt i n ued Revise SMP Revise SMP and submit to ExCo for approval. Conduct diagnosis of Regional stakeholders and report progress to ExCo. tation Plan for ExCo approval. Revise the Change Management Programme Implemen Implement 85% EBS project plan and report progress to ExCo. - Performance Indicators 90% SMP Im - 90% SMP plementation Report. Board approved Regional Cooperation Strategy and Implementa tion Plan. EXCO approved Changed Management Programme. EBS project progress report and final closeout report.
Annual Target Implement 90% of Stakeholder Management Plan (SMP) and report to ExCo. Develop a Regional Cooperation Strategy and Implementation Plan and seek Board approval. Review and Implement 90% of Phase 2 of the Change Management Programme (CMP) and report to ExCo. Complete 100% EBS Project plan and report progress quarterly to ExCo.
Strategic Objective Improve stakeholder engagement. Enhance regional cooperation. Improve customers’ service experience. Achieve integrated ICT systems. 15 16 17 No 18 PerformanceInformation | 2018/2019 –
34 Annual Report 2018 | 2019 PART B - Performance Information PART A General Information
Status - - Annual Status The organisa tion reviewed the B-BBEE Plan and the project plan was approved The by ExCo. implementation of the project plan was at 77% by the end of report A the FY. was approved by ExCo on 28 March 2019. As at the end 94, 7% of FY, of the HR plan A was achieved. report was ap proved by ExCo and HRC. An ERDMS business case was developed, submitted and approved by ExCo. - - Quarter 4 Actual The B-BBEE implemen tation was 77% by the end of March 2019. ExCo approved the final report. At the end of the financial year the implemen tation of the HR plan was at 94.7%. The target for the APP has been met. ExCo approved the report and the report is submitted to the HRC on 15 April 2019. The ERDMS business case was submitted to and approved by ExCo.
Quarter 4 Target Implement 75% of the Phase 1 B-BBEE plan and report to ExCo. Implement 90% of the HR plan and report to the HRC. Submit Fi - nal ERDMS Business case for ExCo approval. - Quarter 3 Actual The B-BBEE plan target was not met as 44, 4% was achieved by the end of the quarter against target A of 50%. report was submitted and approved by ExCo. The HR plan reached 94% implementa tion for the quarter and a report was submitted to The ExCo. report will be submitted to HRC in Jan 2019. The draft ERDMS business case was presented to ExCo and a report was submitted and approved by ExCo.
Quarter 3 Target Implement 50% of the Phase 1 B-BBEE plan and report to ExCo. Implement 75% of the HR plan and report to the HRC. Submit Draft ERDMS Business case for ExCo com - ments. - - Quarter 2 Actual As at the end of the second quarter, has SACAA exceeded the target of 25% and is current ly at 29.6% implementa tion. The HR plan overall annual achievement to date is at 53%. At least 2 stakeholder consultations meetings took place during the reporting period to understand the business requirements for ERDMS.
Quarter 2 Target Implement 25% of the Phase 1 B-BBEE plan and report to ExCo. Implement 50% of the HR plan and report to the HRC. Conduct Stakeholder consultation on business case and report to ExCo.
Quarter 1 Actual Revised B-BBEE plan submitted to ExCo was approved. 15 and a half out of 17 targets were achieved by the end of Q1. ERDMS stakeholder consultations did not take place as required.
Quarter 1 Target Review B-BBEE Plan and submit to ExCo for approval. Implement 25% of the HR plan and report to the HRC. Conduct stakeholder consultation on business case and report to ExCo. Co nt i n ued
Performance Indicators B-BBEE plan 75% implementation. 90% HR Strategy Implementation plan deliverables achieved. ExCo-approved ERDMS business case.
Annual Target Review and implement 75% of Phase 1 B-BBEE - (Transfor mation) Plan aligned to the Transport sector codes and report to ExCo. Implement 90% HR Plan and report to the HRC. Develop ExCo approved Electronic Records and Document Management System business case. -
Strategic Objective Accelerate transformation. Drive a perfor mance culture. Achieve integrated ICT systems. 21 20 No 19 PerformanceInformation | 2018/2019 –
Annual Report 2018 | 2019 35 PART A PART PART B - Performance Information General Information General
The next graph delineates the SACAA’s organisational performance over the last eight financial years - from the 2011/2012 financial year through to the 2018/2019 reporting period. Notably, the SACAA has managed to attain a 100% performance for five (5) consecutive years.
SACAA yearly performance comparison over an 8-year period 100% 100% 100% 100% 100% 100% 94% 84% 80% 74%
60% Performance % 40%
20%
2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19
PREVIOUS YEARS CURRENT YEAR
Graph 02: Organisational performance comparison over an eight-year period
36 Annual Report 2018 | 2019 PART B - Performance Information PART A General Information
Key organisational highlights and initiatives
The next table details some of the SACAA’s organisational highlights for the year ending 31 March 2019.
Organisational highlights
Global Aviation Gender Summit The SACAA initiated and hosted the first-ever Global Aviation Gender Summit in collaboration with ICAO and UNESCO during South Africa’s National Women’s Month in August 2018. The purpose of the three (3) day event was to create a platform for the global aviation community and related industries to engage on the United Nation’s Sustainable Development Goal 5, which speaks to gender parity in the workplace. The Summit was also in support of ICAO’s A39-30 resolution to ensure that the civil aviation industry reaches a 50/50 parity in terms of women representation in senior leadership and professional positions. The event was hosted in Cape Town, South Africa and hosted, under one roof, international delegates from over 43 countries. ACT-CORSIA Initiative The SACAA, under the ICAO Action, Capacity-building and Training for the Carbon Offsetting and Reduction Scheme for International Aviation (ACT-CORSIA) Initiative and the ACT-CORSIA Buddy Partnerships with 6 SADC States, conducted the 1st Session of the ACT-CORSIA Buddy Partnerships Joint Implementation Training at Emperors Palace from 26 - 28 September 2018. The States that were trained during the 1st session were Botswana, Namibia and Zimbabwe. Subsequently training was provided to Lesotho, Zambia and Malawi. Celebration of 20 years of keeping you safe in the sky The SACAA celebrated 20 years of existence on 18 October 2018. The celebration was attended by the former Minister of Transport, Dr Blade Nzimande, the former Deputy Minister, Ms Sindisiwe Chikunga, the SACAA Board, ExCo and employees. This was a celebration of 20 years since the establishment of the SACAA. Inaugural Civil Aviation Industry Awards The inaugural Civil Aviation Industry Awards, held in November 2018, was a major highlight for the SACAA. The awards were aimed at recognising deserving operators in the areas of aircraft owners, aviation safety, outstanding aviation personnel, aircraft maintenance organisations, etc. The event was well-received by the aviation industry and resulted in the SACAA receiving significant commendations from industry role-players. The closure of the ICAO USOAP CMA Corrective Action Plan The closure of the ICAO USOAP CMA Corrective Action Plan reached 84.62% in terms of the findings specific to the SACAA, which is above the target by over 4%. Completion of the Enterprise Business Systems (EBS) The EBS project has been successfully completed. All modules in the EMPIC-EAP system are now live and the system implementation is 100% complete, ready for utilisation. National Psychiatry Conference SACAA’s AvMed team, together with the Aeromedical Psychiatry, was invited to present at the National Psychiatry Conference hosted by the South African Society of Psychiatrists (SASOP). The purpose of the presentation was to highlight mental health challenges faced by the aviation industry and to create awareness of the ICAO SARPs together with the South African Civil Aviation Regulations’ expectations regarding the psychiatrists’ reports. The presentation also afforded the SACAA an opportunity to create awareness around the mental health issues and medication that is not compatible for pilots. Recreation Aviation Administration of South Africa (RAASA) During the year under review the process of integrating the Recreation Aviation Administration of South Africa (RAASA) functions into the SACAA was completed. The functions, previously the responsibility of RAASA, are now under the SACAA umbrella as at 1 April 2019. Aeronautical Information Publication (AIP) The AIP was placed on the SACAA website in PDF file format, thereby concluding the move away from paper-based publications. Updates will be posted in accordance with the AIP quarterly schedule and will greatly simplify the process for clients to remain updated with the latest version. Paper copies will still be available for clients who have not yet evolved. Table 07: Organisational highlights
Annual Report 2018 | 2019 37 PART A PART PART B - Performance Information General Information General
Review of SACAA programmes and activities
Aircraft incidents and accidents
This particular section details the number of accidents recorded during the reporting period. In addition, a three-year comparison is outlined. This is crucial in measuring and gauging the presence or lack of effective oversight of civil aviation operations in a country.
The table below provides an outline of the categories of aircraft involved, as well as the type of activity being carried out by the aircraft at the time of the accident. It is crucial to note that unlike previous years, remotely piloted aircraft of all sizes, are also added to the list.
Accident per aircraft category - 01 April 2018 to 31 March 2019
Aircraft category Commercial Private Training Unknown Total number Glider 0 1 0 0 1 Gyrocopter 0 2 1 0 3 Type-Certified Aircraft (helicopter) 4 11 1 0 16 Type-Certified Aircraft (fixed-wing) 4 23 6 0 33 Non-Type-Certified Aircraft (fixed-wing) 2 18 4 0 24 Non-Type-Certified Aircraft (helicopter) 2 2 0 0 4 Parachute 0 0 0 0 0 RPAS 2 2 0 0 4 Unregistered 0 0 0 1 1 Total 86
Table 08: Aircraft accidents per aircraft category
38 Annual Report 2018 | 2019 PART B - Performance Information PART A General Information
Cumulative number of accidents reported: three-year comparison A total of 83 aircraft and three (3) drone accidents were reported between 01 April 2018 and 31 March 2019, which indicates an increase of one (1) when compared to the same period in 2017/2018. The graph below indicates a three-year (financial year) comparison of accidents.
35
30 28 27 25 26
20 19 19 20 20 19 20 15 17 14 10 12 5 Cumulative total per quarter 0 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total Apr 16 - Mar 17 10 6 3 4 7 3 10 3 7 6 4 9 72 Apr 17 - Mar 18 7 7 5 5 5 10 12 5 10 5 4 8 83 Apr 18 - Mar 19 8 10 10 4 2 6 8 15 3 5 11 4 86 Graph 03: Number of aircraft accidents: a three-year comparison
Cumulative number of fatal accidents: three-year comparison The next graph indicates a three-year (financial year) comparison of the cumulative number of fatal accidents. A total of 15 fatal accidents were reported from 01 April 2018 to 31 March 2019, which indicates an increase of one (1) when compared with the 2017/2018 financial year.
8 8 7
6 6 5 5 5 4 4 3 3 3 3 3 3 3 2
1 Cumulative total per quarter 1 0 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total Apr 16 - Mar 17 1 2 0 0 3 1 3 0 2 2 1 3 18 Apr 17 - Mar 18 0 3 0 1 0 2 2 3 0 1 2 0 14 Apr 18 - Mar 19 1 0 2 1 1 1 4 4 0 0 1 0 15
Graph 04: Number of fatal aircraft accidents: a three-year comparison
Annual Report 2018 | 2019 39 PART A PART PART B - Performance Information General Information General
Cumulative number of fatalities: three-year comparison A total of 20 fatalities were reported from 01 April 2018 to 31 March 2019, which indicates a decrease of one (1) when compared with the same period in 2017/2018. The next graph indicates a three-year (financial year) comparison of fatalities.
10 10 9 8 9 9 8 7 7 6 6 5 5 5 4 4 4 3 3 2 1 1 Cumulative total per quarter 0 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total Apr 16 - Mar 17 1 2 0 0 8 1 4 0 4 4 1 5 30 Apr 17 - Mar 18 0 4 0 1 0 3 3 4 0 2 4 0 21 Apr 18 - Mar 19 2 0 3 2 1 2 5 4 0 0 1 0 20 Graph 05: A three-year comparison of fatalities
Cumulative number of serious incidents: three-year comparison A total of 54 serious incidents were reported between 01 April 2018 and 31 March 2019, which indicates an increase of 24 serious incidents when compared with the same period in the 2017/2018 financial year. There was also an increase of 32 when compared to the 2016/2017 financial year. The next graph indicates a three-year (financial year) comparison of serious incidents.
20 18 18 16 14 15 12 13 12 10 11 8 6 8 8 8 8 4 2 3 0 2 Cumulative total per quarter 0 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total Apr 16 - Mar 17 0 0 0 2 0 0 1 6 4 2 0 6 21 Apr 17 - Mar 18 1 0 2 1 3 4 3 4 1 3 5 4 31 Apr 18 - Mar 19 6 4 3 1 3 4 3 10 5 4 5 6 54
Graph 06: A three-year comparison of serious incidents
Strategy to overcome areas of underperformance The SACAA has achieved 100% against all targets set in its 2018/2019 Annual Performance Plan.
40 Annual Report 2018 | 2019 PART B - Performance Information PART A General Information
Status 3 1 0 0 3 3 S 46 30 86 Q 4 Actual 3 3 5 0 2 R 42 53 108 216 1 4 6 3 1 S 24 12 14 65 Q 4 Target 5 4 0 4 R 60 68 31 123 295 3 0 3 2 S 18 17 51 12 106 Q 3 Actual 5 0 3 R 48 14 10 13 129 222 1 4 6 3 0 S 25 12 12 63 Q 3 Target 4 4 0 2 R 58 67 29 123 287 4 5 0 4 3 S 27 36 68 147 Q 2 Actual 6 8 0 5 R 65 15 35 130 264 1 5 7 4 1 S 25 12 14 69 Q 2 Target 5 5 0 4 R 60 68 31 124 297 2 2 0 3 3 S 25 33 50 118 Q 1 Actual 5 5 0 4 R 37 45 28 127 251 1 4 6 3 1 S 25 12 14 66 Q 1 Target 5 4 0 4 R 60 68 31 124 296
Surveillance 0 11 12 87 19 13 116 199 Actual 457
Surveillance 4 3 99 48 54 17 25 13 Target 263
Renew 0 19 77 28 14 494 192 129 Actual 953 MOSP Annual Renew 0 19 17 Target 14 494 238 271 122
Target 1 175
Operations Aircraft Maintenance Organisation (AMO) Approved Manufacturing Organisation (AMORG) Air Operator Certificate (AOC) Aviation Training Training Aviation Organisation (ATO) RPAS Operators RPAS Certificate (ROC) Flight Simulation Devices Training (FSTD) Airports (Aviation Medicine) Approved Design Organisation (ADO) Total MOSP MOSP Total Activities
Strategic Objective Achieve a step- change in regulating aviation safety and security Surveillance and oversight auditing activities The next few tables provide a comprehensive analysis of the Mas ter Oversight and Survellance Plan (MOSP) activities. Safety Operations MOSP 2018/2019 Aviation Table 09: Aviation Safety Operations MOSP 2018/2019 Safety Operations MOSP Aviation 09: Table
Annual Report 2018 | 2019 41 PART A PART PART B - Performance Information General Information General
Notes on deviations ASO
Notes to the Scorecard: ASO Number Explanation Note 1 Seventeen (17) additional surveillance inspections were conducted on the following organisations: 1. Mistral Aviation Services (Pty) Ltd 2. Accolade Aviation 3. Aero Natal (Pty) Ltd 4. NAC Helicopters 5. Sport Aviation 6. Cemair (Pty) Ltd 7. Denel Aviation 8. Chopper Worx Maintenance (Pty) Ltd 9. Mistral Aviation Services (Pty) Ltd 10. Plennegy (Pty) Ltd 11. Heli-Afrique 12. SA Red Cross Air Mercy Service Nelspruit 13. Zulu Aviation Africa Cc 14. Gryphen Aerospace (Pty) Ltd 15. Pilatus Pc-12 Centre 16. Malilangwe (Pty) Ltd 17. Nyeleti Technologies Note 2 Eight (8) additional surveillance inspections were conducted on the following organisations: 1. Rainbow Skyreach 2. Jonker Sailplane 3. Paramount Aerospace Systems 4. Hansolt Optronics 5. Omnipless 6. Sport Plane Builders 7. Aero Services 8. Shadow Lite Note 3 Seven (7) Air Operator Certificate audits could not be done due to the organisations being dormant. Note 4 Thirty-six (36) ATO’s audits could not be done due to the organisations being dormant. This led to the SACAA (ASO) not being able to conduct both the renewal and surveillance audits/inspections on these organisations (72 inspections). Note 5 Thirteen (13) additional inspections due to the certification of new organisations. Note 6 Annual Target met. Note 7 Target met as planned. Note 8 Eight (8) additional surveillance inspections were conducted on the following organisations: 1. Comporob CC 2. Clifton Electronics 3. Aero Services (Pty) Ltd 4. Aerostruct Consulting CC 5. Paramount 6. Challenge Air CC 7. Jonker Sailplane 8. AME Aviation Note 9 Although the number of renewal audits for the quarter was not met, significant progress has been made with surveillance audits. Except in instances where an approval holder surrenders their approval or opts not to renew, or where the approval is suspended, the division met the planned targets. In relation to surveillance audits, targets were exceeded and this was mainly due to a follow-up audit and surveillance audit of a newly- certified approval holder who was not part of the plan at the beginning of the financial year.
Table 10: Aviation Safety Operations MOSP 2018/2019 – deviation explanation
42 Annual Report 2018 | 2019 PART B - Performance Information PART A General Information
Status S 63 99 35 37 234 Q 4 Actual 5 2 R 29 70 106 4 S 59 72 52 187 Q 4 Target 5 R 25 46 18 94 S 49 98 61 30 238 Q 3 Actual 7 3 R 11 49 70 S 49 82 64 12 207 Q 3 Target 3 R 11 15 40 69 S 63 45 57 27 192 Q 2 Actual 6 5 R 41 41 93 S 54 47 61 14 176 Q 2 Target 3 R 10 51 43 107 S 55 14 82 35 186 Q 1 Actual 5 8 R 68 42 123 9 S 62 69 16 156 Q 1 Target Security Notes on deviations – Aviation 5 4 R 76 45 130
Surveillance 230 256 235 129 Actual 850 ** 46 224 210 246 Surveillance 726 Renew 27 18 145 202 Actual 392 MOSP Annual *Renewal 31 28 167 174 400 Target Target was that some airlines ceased to operate. Target Reason for not meeting Renewal There were follow-up inspections to operators with compliance issues and Target: Reasons for exceeding Surveillance new operators. Planned renewal activities were not realised due to cargo facilities that opted out of the secure supply chain, and replaced with Surveillance activities. Air Operator Certificate renewals were conducted, following streamlining with Flight Operations. Additional Organisations and one (1) Training Security Aviation Organisations did not renew their status as Training Nine (9) The target was exceeded due to a huge demand for instructor certification, as well organisation is on a 5-year renewal. canine certification.
Operations Airports and Airlines Regulated Agents and Known Consignors Dangerous Goods Safety Oversight Training Training Organisation Total MOSP MOSP Total Activities
Strategic Objective Cargo Security Dangerous Goods Organisations Training Notes: Aviation Security Notes: Aviation Airports and Airlines Achieve a step- change in regulating aviation safety and security Aviation Security MOSP 2018/2019 Aviation 2018/2019 Security MOSP Aviation 11: Table Table 12: Aviation Security MOSP 2018/2019 – deviation explanation Security MOSP Aviation 12: Table
Annual Report 2018 | 2019 43 PART A PART PART B - Performance Information General Information General
Status 3 8 7 S 28 10 for Q 4 Actual 0 0 5 R 29 24 3 5 6 S 27 13 Q 4 Target 0 0 6 R 32 26 2 8 8 S 31 13 Q 3 Actual 0 0 7 R 39 32 2 5 8 S 25 10 Q 3 Target 0 0 7 R 37 30 6 1 3 S 25 15 Q 2 Actual , Pilanesberg, and Pietermaritzburg. Mountain View , Pilanesberg, and Pietermaritzburg. Mountain View 0 0 R 59 49 10 Airport for Phase 3, and Parys Airport, and Kimberley Airport. Airport, and Kimberley Airport for Phase 3, and Parys 4 0 6 S 25 15 Q 2 Target 0 0 7 R 52 45 3 7 S 10 46 26 Q 1 Actual 0 0 8 R 37 29 3 4 9 S 31 15 Q 1 Target 0 0 9 R 39 30
Surveillance 14 64 24 28 Actual 130 Notes on deviations – Aviation I nfrastructure Notes on deviations – Aviation 12 53 14 ** Surveillance 29 108 0 0
Renew Actual 30 164 MOSP 134 Annual 0 0
*Renewal Target 29 160 Target 131
Operations cancelled licence. Three (3) inspections scheduled in the MOSP were shifted to Quarter 3. Three (3) inspections scheduled in the MOSP cancelled licence. Aerodromes Quarter 2 Renewals: Extra audits were conducted Kwandwe Aerodromes Quarter 3 Renewals: Mthatha not done in but shifted to 4 due existing non-compliance. MOSP Quarter 3 increased by which emanated from 1 schedule. Airport was conducted in Quarter 4. Zeerust aerodrome licence suspended. Aerodromes Quarter 4 Renewals: Mthatha and Groblersdal were added to follow up on non-compliances. Warmbaths, Audits: Lydenburg, Aerodromes Quarter 3 Surveillance APP. There were an extra three (3) audits over and above what was committed in the Audits: Aerodromes Quarter 4 Surveillance Services an extra approval inspection was done for a new service at Grand Central. Traffic Air For For Communication, Navigation, and Surveillance, some follow-up surveillances were done for critical stations. Explanation Aerodromes Quarter 1 Renewals: Extra audits were conducted at Kimberley Total MOSP MOSP Total Activities Aviation Aviation Environmental Protection (AEP) Communication, Navigation, and Surveillance (CNS) Aerodromes Air Traffic Traffic Air Services
Strategic Objective 2 3 4 Note Number 1 Achieve a step- change in regulating aviation safety and security Table 14: Aviation Infrastructure MOSP 2018/2019 – deviation explanation deviation – 2018/2019 MOSP Infrastructure Aviation 14: Table Aviation infrastructure MOSP 2018/2019 infrastructure Aviation Table 13: Aviation Infrastructure MOSP 2018/2019 Infrastructure MOSP Aviation 13: Table
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Information and Communication reason that the SACAA Board has dedicated the responsibility of ICT governance oversight to the Audit and Risk Committee. Technology Management continues to report on ICT Governance, ICT Risks and Major ICT Projects to the Board through the Audit and Risk Information Communication Technology (ICT) remains a Committee. strategic driver for SACAA, and it is aligned to the following strategic objectives in the SACAA Annual Performance Plan (APP) as agreed to with the Department of Transport (DoT): Cyber security
1. Significantly improve customer experience; and An independent service provider, specialising in cyber security, 2. Improve organisational efficiency. has been appointed to monitor the network resources, the appointed service provider monitors the network infrastructure, Several ICT deliverables as outlined in the APP were successfully applications, database and conducts penetration tests. delivered during the reporting period: During the reporting period the organisation was not exposed to The Enterprise Business System project has major threats. Most of the attempts were cyber crime attempts, in which common criminals sent impersonation emails to been fully implemented employees; either to solicit information or money, none of which All the modules of the project have been successfully completed were successful. and deployed. The successful implementation of EBS will result in improved turnaround times of the services offerings, consistent and reliable services standards of SACAA services Review of stakeholder relations offerings. This milestone further makes way for the submission of corrective action handling, online examinations booking and The SACAA stakeholder management focused on centralising automation of online submission of various applications from communication, sharing information, building relationships and the aviation industry. The collection of data over the years will cooperation between the organisation and stakeholders locally, enable the SACAA to implement a Risk Performance Based regionally and globally. One of the primary goals of the SACAA Oversight amongst other innovations. is to evolve into a customer-centric entity that has solid relations with its multiple stakeholders. Each year the SACAA implements Effective from the 1st quarter of 2019/2020, outstation a myriad of communication and stakeholder management examinations will be conducted electronically as a result of the activities. Key among the initiatives are information face-to- successful implementation of the EBS. face sharing sessions that can be amplified, depending on the need and desired outcome. The ERDMS will help the SACAA Electronic records and document management to expedite the process of retrieving information and thereby helping expedite client services processes. It will also minimise system the risk of documents getting lost. The Business case to implement the Electronic Documents and Records Management System (EDRMS) has been approved by ExCo during the reporting period. This paves the way for the sourcing of a service provider to start with the development of an EDRMS fit for the Organisation’s needs in the coming financial year.
Introduction of the card licence for various aviation licence holders During the reporting period, the organisation successfully implemented the technology and equipment to issue card licences. The new card, which is more secure and easier to carry, will be rolled out from the next financial year. The card is secure and has a 2D barcode with access to real-time information about the licence holder’s type ratings and necessary medical information.
ICT governance In line with the King IV Principles, ICT is considered to be a critical strategic element of the organisation, and it is for this
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Key stakeholder engagement activities The next table delineates stakeholder engagement activities undertaken during the financial year.
Stakeholder engagement activities
Type of engagement Date Details DCA meeting with African Civil 04 - 06 June 2018 The Director of Civil Aviation (DCA), Ms Poppy Khoza, hosted a meeting of African Aviation Directors-General Civil Aviation Directors-General to discuss progress on the implementation of priority actions relating to Aviation Security and Facilitation, as agreed to at a previous meeting of Directors General of Civil Aviation, in November 2016. This was done in the DCA’s capacity as Lead Champion, nominated at the previous meeting of the Directors- General of Civil Aviation. The meeting was supported by the two ICAO African Regional Offices, as well as the African Civil Aviation Commission (AFCAC). Aviation Security Road Shows 25 - 29 June 2018 The Aviation Security Division conducted several aviation security road shows. Conducting road shows is viewed as critical, in that it engenders a security culture which is critical to the implementation of aviation security programmes by all in the industry and also helps to enhance compliance. Security Awareness Campaign 05 - 09 July 2018 A security awareness campaign was conducted at the following airports: • OR Tambo International Airport, • Cape Town International Airport, • King Shaka International Airport, • Port Elizabeth International Airport, and • Braam Fischer International Airport. The objective of the campaign was to inculcate a security culture among members of the public as well as the security community at the various airports. The campaign was a great success. Safety Management 10 - 11 July 2018 The objective of this workshop was to equip the industry with the necessary skills and Performance Workshops knowledge to implement a functional Safety Management System (SMS) with particular emphasis on safety performance management. Dangerous Goods and Cargo 12 July 2018 The objective of this workshop was to discuss issues relating to Dangerous Goods and Forum Cargo Security as well as to give feedback on the latest developments in Dangerous Goods and Cargo Security globally. Safety Management 24 - 25 July 2018 The objective of this workshop was to equip the industry with the necessary skills Performance Workshop and knowledge to implement a functional SMS with particular emphasis on safety performance management. Aviation Security Training 24 - 26 July 2018 The objective of the event was to train and refresh awareness of aviation security Instructor Workshop among instructors. National Transportation Safety 31 July - 2 August The objective of this meeting was for aviation organisations that operate aviation safety Board Seminar in South Africa 2018 reporting systems to meet and discuss their confidential reporting systems. Safety Management System 21 - 22 August The objective of the workshop was to educate the industry on how to manage or (SMS) Workshop 2018 develop safety performance management. Safety Management System 28 - 29 August The objective of the workshop was to educate the industry on how to manage or (SMS) Workshop 2018 develop safety performance management. Handling Radioactive Material 10 - 14 September The National Nuclear Regulator presented training to the Dangerous Goods and Cargo Incidents 2018 Security inspectorate as well as members of the Emergency Response Services unit of the South African Police Service. The training resulted in a better understanding of radioactive material and emergency response protocols in handling radioactive material incidents. Aerodromes and Facilities 27 September An Aerodromes and Facilities workshop was conducted to educate the industry about Department 2018 improving aviation safety, and an introduction to the proposed Sub-Part 5 of the Civil Aviation Regulations.
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Stakeholder engagement activities | Continued
Type of engagement Date Details Air Cargo Security Workshop 28 September This workshop was aimed at educating the Aviation Security industry members on how 2018 to become known consignors.
Flight Instructor and 22 - 23 August Flight Instructor and Designated Flight Examiner conferences were hosted by the Designated Flight Examiner 2018 SACAA Personnel Licensing Department in Gauteng. This platform provided an conferences opportunity to address a large number of pilots and to create awareness of the functions and of the Medical Department and how clients can contact SACAA on the following issues:
19 - 20 September • Common Causes of Inflight Incapacitation and Safety Management; 2018 • Mental Health Issues in Aviation, including but not limited to alcohol and substance abuse cases; • The Aeromedical Committee; • Impact of Upper Age Limit; • Fatigue Risk Management and Erratic Behaviour and Tantrums in the Cockpit; and • Introduction of the web-based EBS System. Air Ambulance Workshop - 05 October 2018 The objective of the workshop was to educate the industry about the operational Aviation Medicine Department requirements of Part 138 of the Civil Aviation Regulation. ICASS (International 23 - 25 October The principal objectives of the ICASS Group are: Confidential Aviation Safety 2018 • To provide advice and assistance in the start-up and operation of a confidential Systems) - AIID reporting system; • To facilitate the exchange of safety related information between independent confidential aviation reporting systems; and • To identify solutions to common problems in the operation of such systems. Aviation Security Training 25 October 2018 The objective was to give updates on the 39th ICAO assembly resolutions and the Instructor Workshop Global Aviation Security Plan.
Air Traffic Services Designated 14 November The designation process has necessitated a review of the SACAA Air Traffic Services Examiners Workshop 2018 sectional internal procedures, and as such Part 65 was amended. Stakeholder Management 07 March 2019 Interim SADC Aviation Safety Organisation (ISASO) requested the SACAA to host a meeting on ISASO Levy Concept Proposal in Johannesburg.
SACAA Durban Office 11 March 2019 SACAA is working towards establishing regional offices throughout the country in the Introductory Breakfast quest to ensure a national footprint and to provide efficient services.The new planned office will be in the Durban area, which will be launched in the next financial year, i.e., 2019/2020. The objective of the breakfast was to meet all relevant stakeholders in the Eastern Region and to introduce the idea behind the Durban office and the envisaged services, and whilst ensuring effective consultation at all levels. National Aviation Conference 13 - 15 March The inaugural annual National Aviation Conference consolidated the Industry Growth, 2019 the National Safety Seminar and the Security Seminar. The objective of the National Aviation Conference was to bring all industry players and relevant stakeholders together to discuss the current and future aviation-topical issues, gather information and find relevant solutions. Captains of the Industry 19 March 2019 The SACAA convened the 2nd meeting of the Captains of Industry Forum at the Emperors Palace Convention Centre. The Forum was attended by Chief Executives of Aviation entities, Associations and also the SACAA Executive team. The following presentations were delivered by SACAA: (1) The State of the SACAA, (2) CORSIA implementation, (3) ICAO Next Generation of Professionals Programme (NGAP) and (4) Shifting Trends in Air Travel, among others.
Table 15: Stakeholder engagement activities
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Technical Assistance and Cooperation Missions
There were few Regional Technical Assistance and Cooperation Missions undertaken during the financial year under review. Through the SACAA, South Africa continues to make inroads in terms of contributing to Africa’s aviation safety and security record. During the reporting period, the SACAA championed technical cooperation that will benefit our peers across the continent and the globe. The following table outlines the assistance offered.
Country Engagement Outcome Kenya Benchmarking of the The SACAA Aviation Medical department hosted the CASSOA Chief Medical aviation medical processes Assessors from Kenya, Uganda, Rwanda, and Tanzania for the purposes of Uganda benchmarking the aviation medical processes.
Rwanda
Tanzania Namibia Legal and Aviation The Namibian Civil Aviation Authority requested a visit to the SACAA Aviation Compliance Library and relevant functions. The mission also involved a visit by the Namibia Technical Librarian to SACAA and exposure to library functions. Namibia Aviation Infrastructure The Namibian Civil Aviation Authority requested SACAA to provide PANS-OPS Inspector on-the-job-training. Zimbabwe Aviation Infrastructure The South African Civil Aviation Authority received a request from the Civil Aviation Authority of Zimbabwe regarding on-the-job-training for a PANS-OPS and Charts inspector as part of her final stage towards being an authorised inspector to conduct safety oversight on flight procedure design.This took place from 28 January 2019 until 08 February 2019. Botswana Aviation Safety Operations The Civil Aviation Authority of Botswana requested technical assistance with the registration and certification of the Embraer 170 aircraft. Namibia Aviation Safety Operations The Namibian Civil Aviation Authority requested a benchmarking exercise with regard to Personnel Licensing and Examinations. Zambia Aviation Safety Operations The Civil Aviation Authority of Zambia requested technical assistance with on- the-job training for conducting Aviation Training Organisation certification. Eswatini Aviation Safety Operations The Eswatini Civil Aviation Authority (ESWACAA) visited the SACAA for assistance with the Air Operator Certificate renewal on-the-job training. Kenya Aviation security The South African Civil Aviation Authority released one inspector, a short-term expert (STE), to assist as a team member in the presentation of a National Inspectors Course that took place in Kenya during the period 10 - 18 April 2018. South Africa Stakeholder Management The Interim SADC Aviation Safety Organisation (ISASO) requested the SACAA to host a meeting on ISASO Levy Concept Proposal in Johannesburg. The meeting took place in January 2019. United Kingdom Aviation Security The Director General of UK Civil Aviation - DCA responded to the invitation to collaborate on Aviation Security matters and the request for a Technical Cooperation Agreement.
Table 16: Regional technical assistance and cooperation missions
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SACAA revenue collection
The next table illustrates that the total revenue of R702.9 million for the financial year under review increased by 8.5% when compared to the R647.6 million in 2017/2018. It is 1.2% lower than the budgeted revenue collection of R711.7 million for the financial year under review. The Passenger Safety Charge contributes 75.7% of total revenue. The revenue from the Passenger Safety Charge increased by 9.4% when compared to the previous year, mainly as the result of a 1% increase in passenger numbers and an increase in the Passenger Safety Charge from R22.29 to R23.61 with effect from 01 April 2018.
Interest revenue from financial institutions increased by 5.1% as a result of surplus funds invested, as well as improved cash flow management.
Passenger Safety 2017/2018 total revenue Charge R647.6 million 9.4% 2018/2019 total revenue Passenger safety charge R702.9 million 01 April 2018 R22.29 R23.61 increased passenger numbers 8.5% increased 1%
Revenue Collection 2018/2019 2017/2018 Source of revenue Budget Actual Variance Budget Actual Variance R' million R' million R' million R' million R' million R' million Passenger Safety Charge 539.2 532.3 (6.9) 486.1 486.7 0.6 User fees 102.7 99.8 (2.9) 96.8 93.1 (3.7) Fuel levy 28.1 25.6 (2.5) 28.2 26.5 (1.7) Accident and incident investigation 21.9 21.9 - 20.7 20.7 - Interest received 13.9 18.5 4.6 15.7 17.6 1.9 Other income 5.9 4.8 (1.1) 3.6 3.0 (0.6) Total 711.7 702.9 (8.8) 651.1 647.6 (3.5) Table 17: SACAA revenue collection
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Introduction
“Sound governance is not some abstract ideal or utopian pipedream. Nor does it occur as a result of accidents or sudden outbreaks of altruism. It happens only when leaders lead with integrity, when directors actually direct and when major organisations are held to the highest standards of accountability by vigilant stakeholders and informed individuals.” J Richard Finlay (2008) When CEOs fail to lead. http://finlayongovernance.com/
The governance landscape in South Africa over the past year Management Act, 1999 (Act No.1 of 1999) (PFMA). In terms of has been beleaguered by corporate governance deficiencies, the PFMA and the Civil Aviation Act, 2009, (Act No. 13 of 2009), coupled with a rapidly changing technological environment. This the SACAA Board is the Accounting Authority, whilst the Minister changing landscape has caused legal entities, whether public or of Transport is the Executive Authority. private, to reflect on its governance practices and adapt these where necessary. As part of ingraining its governance mandate in terms of the above legal instruments, the then interim Board held an Over the past few years and as reflected by the continuous clean induction session upon appointment in April 2018. The same audits as well as the numerous and consecutive Clean Audit applied in February 2019 with the appointment of a permanent Awards from the Auditor-General of South Africa (AGSA), the Board, which took over the baton on 01 December 2018. SACAA has clearly worked diligently to ensure the presence of effective internal controls, whilst also entrenching the principles These sessions enable Board members to understand the of good governance throughout the organisation. business of the SACAA, its mandate in terms of the Civil Aviation Act, the organisation’s strategy and risks, as well as the Unsurprisingly, solidifying its focus on the four good governance organisation’s governance framework. These initiatives have outcomes that are articulated in the King IV Report on Corporate made governance pervasive; and ensured that the Board Governance™ (King IV Report™) was key for the SACAA during conducts its affairs with accountability, transparency, fairness, the 2018/2019 financial year. To this end, the Board intensified and prudence. its attention on the four outcomes, namely: As a strategic Accounting Authority that subscribes to the • Ethical Culture; principles of the King IV Report on Corporate Governance™, the Board is satisfied with the SACAA’s application of the King • Good Performance; IV™ principles; and will constantly strive for improvement as • Effective Control; and governance best practices evolve. • Legitimacy.
Additionally, the Board continued to monitor progress on the closure of all gaps that were identified through the King IV™ gap analysis that was conducted in 2017. Moreover, greater emphasis was placed on ethical leadership, and as a result, several initiatives were undertaken to embed the ethical principles adopted by the Board. All these activities demonstrates the SACAA Board’s unwavering commitment to ethical conduct.
It is worth pointing out that the sound corporate governance practices and structures, coupled with strong internal controls, form the necessary bedrock of the SACAA’s successful and consistent performance in recent years. The SACAA, as a Schedule 3A entity, has remained highly compliant to all applicable regulatory prescripts, especially the Public Finance
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A snapshot of the Sacaa’s application of The King IV™ Principle
Principles Principle Description High Level Summary Commentary on Application Principle 1 The governing body should lead ethically and The Board has an approved Ethics policy effectively. and Code of Conduct in place. The Board, through its Human Resources Committee Applied (HRC), monitors the implementation of the plan to institutionalise ethics. Principle 2 The governing body should govern the ethics Ethics oversight has been delegated to of the organisation in a way that supports the the HRC. The Committee is tasked with establishment of an ethical culture. providing oversight on the implementation of an ethics plan that was approved during the reporting period; as well as monitoring the implementation of various ongoing Applied activities aimed at enhancing an ethical culture. The SACAA also adopted key organisational cultural pillars during the review period, and ethics was identified as one of these pillars. Principle 3 The governing body should ensure that the The SACAA has adopted a stakeholder- organisation is and is seen to be a responsible inclusive approach and included a set corporate citizen. of values as part of its strategic plan. In addition, the Board regularly receives reports on corporate social responsibility and stakeholder engagement activities from Management. The Board is Applied committed to transformation and prides itself in achieving its employment equity targets. The Board also has a legal compliance management policy in place that is aimed at ensuring compliance to all applicable laws and regulations. Principle 4 The governing body should appreciate that Strategy and performance management the organisation’s core purpose, its risks is firmly anchored in the Board’s agenda and opportunities, strategy, business model, and planning. A robust strategic planning performance and sustainable development are process is undertaken annually, which Applied all inseparable elements of the value creation includes Executive Management. The process. Board also considers and approves the strategic risks as part of the strategic planning process. Principle 5 The governing body should ensure that The reports issued by the SACAA are reports issued by the organisation enable aligned to the PFMA, National Treasury stakeholders to make informed assessments guidelines, and the King IV™ principles. of the organisation’s performance and its The information enables stakeholders to Applied short-term, medium-term and long-term make informed assessments about the prospects. entity. The Annual Report is prepared each year and tabled in Parliament. Table 18: A snapshot of the SACAA’s application The King IV™ Principle
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A snapshot of the Sacaa’s application of The King IV™ Principle | Continued
Principles Principle Description High Level Summary Commentary on Application Principle 6 The governing body should serve as the focal The Board’s responsibilities are clearly point and custodian of corporate governance in articulated in its Board Charter and Applied the organisation. delegation to its Committees defined in the Committees’ approved terms of reference. Principle 7 The governing body should comprise the The Board is diversified in terms of it skills, appropriate balance of knowledge, skills, qualifications, and experience. This is experience, diversity and independence also stipulated in terms of section 77 of Applied for it to discharge its governance role and the Civil Aviation Act. In terms of gender responsibilities objectively and effectively. representation, the Board is diverse and comprises 50% males and 50% females. Principle 8 The governing body should ensure that its The Board has an approved delegation of arrangements for delegation within its own authority in place, coupled with adequate structures promote independent judgement policies and procedures. Applied and assist with balance of power and the effective discharge of its duties. Principle 9 The governing body should ensure that the The Board undertakes a Board-evaluation evaluation of its own performance and that exercise every two years. The last of its Committees, its Chair, and its individual evaluation was in April 2017. A report was members, support the continued improvement prepared and tabled at one of the Board in its performance and effectiveness. meetings. The report was also shared with the Executive Authority, i.e. the Minister of Transport. All areas of improvement were Applied addressed by way of an action plan that was monitored by the Board. The Board is due for further evaluation in 2019. It is anticipated that an independent evaluation will be conducted, involving the use of questionnaires, interviews, and reporting. Principle 10 The governing body should ensure that The Board ensures proper delegation to the appointment of, and delegation to, its Committees through terms of reference management contribute to role clarity and and to Management through the delegation the effective exercise of authority and of authority and Board resolutions from responsibilities. time to time. The Board has an annual work plan that includes Committees and Applied provides for role clarity and the effective exercise of duties. The Board structures were reviewed in April 2018 and again in February 2019, thereby ensuring effectiveness. Principle 11 The governing body should govern risk in a The Board has a risk management way that supports the organisation in setting framework and policy in place. The Board and achieving its strategic objectives. has set the risk appetite and identifies the strategic risks annually, as part of the Applied strategy development process. Strategic risk reports are tabled quarterly to the Board as well as the Board’s Audit and Risk Committee (ARC).
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A snapshot of the Sacaa’s application of The King IV™ Principle | Continued
Principles Principle Description High Level Summary Commentary on Application Principle 12 The governing body should govern technology There are different governance structures and information in a way that supports the in place at Board and ExCO level to govern organisation setting and achieving its strategic technology and information adequately. Applied objectives. There is an IT Steering Committee in place and its reports on technology and information are tabled quarterly at the ARC. Principle 13 The governing body should govern compliance The Board adopted a legal compliance with applicable laws and adopted, non-binding management policy in March 2018. rules, codes and standards in a way that During the reporting period, training supports the organisation being ethical and a was conducted and implementation Applied good corporate citizen. commenced. The Board’s oversight on legal compliance is delegated to the ARC and progress is reported by Management on a quarterly basis to this Committee. Principle 14 The governing body should ensure that the The HRC provides oversight on issues organisation remunerates fairly, responsibly of remuneration. The Committee keeps and transparently so as to promote the abreast with changes in the remuneration achievement of strategic objectives and environment. In March 2019 the HRC positive outcomes in the short, medium and independently reviewed the SACAA’s Applied long term. salary bands. The adopted remuneration policy has applied all the relevant King IVTM principles with emphasis put on ensuring fairness, transparency, and being responsible. Principle 15 The governing body should ensure that The Board has an approved combined assurance services and functions enable an assurance framework in place. effective control environment, and that these Implementation of the combined assurance Applied support the integrity of information for internal plan progressed well during the 2018/2019 decision-making and of the organisation’s financial year. This is an area that is gaining external reports. momentum at SACAA. Principle 16 In the execution of its governance role and There is an approved three-year responsibilities, the governing body should stakeholder management plan, and the adopt a stakeholder-inclusive approach Board continued to monitor progress that balances the needs, interests and against this plan. In addition, a stakeholder Applied expectations of material stakeholders in the management policy was crafted by best interests of the organisation over time. Management and subsequently approved by the Board.
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The Board, as the Accounting Authority, constantly keeps abreast of the latest developments that affect the SACAA, thereby ensuring that the Board’s consideration of matters of strategy, policy and performance are always robust, informed, and impactful.
The Minister of Transport appointed an interim Board with effect from 01 April 2018 for a period of six (6) months. The interim Board’s term ended on 30 September 2018. In January 2019, the Minister of Transport appointed a new Board retrospectively from 01 December 2018. Board induction was provided for both the interim and new Board, thereby ensuring that they are acclimatised to the core business of the SACAA.
The Board continues to remain the focal point of corporate governance as enunciated in the King IV Report™ as well as the Civil Aviation Act, and has concerned itself in the past year with the following key activities:
Reviewing of the SACAA’s 2019/2020 Annual Performance Plan, which included the review of the vision, mission, 1 values, strategic goals, and objectives.
Ensure governance in the implementation of the ICAO Universal Safety Oversight Audit Programme (USOAP) 2 Continuous Monitoring Approach (CMA) audit Corrective Action Plan and its accosted progress reports.
Enhancing stakeholder value through oversight of the implementation of the approved three-year Stakeholder 3 Management Plan.
Ensuring oversight of key organisational projects, namely: the implementation of the Enterprise Business System, Flight Inspection Unit’s acquisition and disposal of aircraft, monitoring of the implementation of the 4 RAASA Transitional Plan and HR Operational Plan, and the Relocation Plan of the SACAA’s head office. 5 Reviewing of various policies and strategies. 6 Monitoring the implementation of the King IV™ gap analysis report. 7 Reconstitution of Board Committees.
It is important to emphasise that the Board steadfastly applies a stakeholder-inclusive model of corporate governance, whereby the interests of all stakeholders are taken into account during the development and implementation of the SACAA Strategy and the Annual Performance Plan.
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In terms of governance, the following key activities were Role and Responsibilities of the Board embarked upon during the year under review: The Board is expected to retain full and effective control over the • The Board held a two-day strategic planning session from governance of the SACAA; and in this regard, a clear division 22 to 23 August 2018. The session was attended by Board of responsibility exists at Board and Executive Management members and Executive Management and culminated in level. It has delegated some of its powers to the Director of Civil the 2019/2020 Annual Performance Plan for the SACAA. Aviation (DCA) and the SACAA’s Executive Committee through • The Board submitted its performance agreement for a delegation of authority (DoA) framework, which has been duly 2019/2020 to the Minister of Transport during March 2019. approved by the Board as the Accounting Authority. The DoA, however, does not absolve the Board of its responsibilities and • The Executive Authority approved the SACAA’s Strategic accountability. Plan and the Annual Performance Plan for the 2019/2020 financial year. The role of the Board is, among others, to: • The Board successfully held its Annual General Meeting on • Provide effective leadership; 30 August 2018, and all resolutions tabled were approved by the Executive Authority. • Develop the SACAA Strategy and Annual Performance Plan; • The Corporate Governance Plan was reviewed and submitted to the Minister of Transport as the Executive • Manage the SACAA’s income, expenditure, and assets; Authority, representing the Shareholder, i.e. the South • Determine, oversee, and revise the corporate governance African Government. structures within the SACAA; • The Board reviewed and approved the Regional Co- • Determine, oversee, and revise the human resources operation as well as the Branding Strategy. policies, and human resources strategies of the SACAA; • The Board Charter and all Committees’ terms of reference • Ensure that the SACAA is managed effectively in pursuance were reviewed during the reporting period. of its mission, by providing oversight over the entity’s strategies, policies, decisions, and the execution thereof; The Board, as the Accounting Authority, confirms that in compliance with the PFMA and the Board Performance • Appreciate that the SACAA’s strategy, risk, performance, Agreement, it has consistently reported, on a quarterly basis, and sustainability are inseparable; the SACAA’s overall performance to the Executive Authority. All • Review and approve the SACAA’s financial objectives, plans four quarterly reports were submitted timeously to the Executive and actions, including cost allocations and expenditures; Authority. At year-end, the Board affirms that the entity has yet again met 100% of its annual targets, which demonstrates • Ensure that the SACAA has an effective and independent a continued commitment in terms of the King IV Report™ to Audit and Risk Committee; realise good and stable performance. The Board maintains an • Ensure that there is an effective risk-based internal audit open and transparent engagement with the Executive Authority function, as well as effective governance of risk management and regularly informs the Executive Authority of progress, as well as information technology infrastructure; and milestones and challenges facing SACAA through written correspondence and interfaces with the Minister and Deputy • Ensure that the SACAA complies with all the applicable Minister of Transport. laws, and also considers adherence to non-binding rules, codes, policies and standards.
Accounting Authority The above-mentioned are not exhaustive; but provide a high- The Accounting Authority continued to receive, on an on-going level summary of the roles and responsibilities of the Board as basis, constructive feedback from the Executive Authority on its stipulated in the Civil Aviation Act and the Board Charter. reported performance. The Board consistently provided strategic direction to the organisation; and endeavoured to achieve all Board Charter obligations as stated in the SACAA’s Annual Performance Plan and the Board Performance Agreement. The Board presented The Board has adopted a formal Charter, which clearly articulates the SACAA’s 2017/2018 Annual Report to the shareholder at the the respective roles, responsibilities and authorities of the Board, Annual General Meeting held on 30 August 2018. The positive both individually and collectively. The Board Charter is reviewed feedback received from the Executive Authority was refreshing and approved annually to ensure that it remains relevant and is and welcomed. aligned with best practice. It also lays the foundation for a shared
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understanding of the Board’s role throughout the organisation. The interim Board’s term came to an end on 30 September 2018 The Board confirms that, during the period under review, it has and the Minister of Transport appointed a new Board, effective satisfactorily discharged its duties and obligations as contained 01 December 2018 in accordance with the Civil Aviation Act. in the Board Charter, thereby ensuring value-creation in all that it does in terms of ethics, performance, financial sustainability, Members of the Board as at 31 March 2019: and human capital. Mr E Khosa (Non-executive) - Reappointed: Board composition Chairperson Prof. NV Dyani- (Non-executive) - Reappointed At the commencement of the reporting period, i.e. on 01 April Mhango 2018, the Minister of Transport appointed an interim Board for Mr M India (Non-executive) - Reappointed a period of six (6) months, comprising seven (7) non-executive Directors and one (1) Executive Director, namely the Director of Mr S Sooklal (Non-executive) - Reappointed Civil Aviation. Dr BC Suckling (Non-executive) - Reappointed Ms B Koyana (Non-executive) Members of the interim Board appointed on 01 April 2018 comprised: Ms T Phewa (Non-executive) - Reappointed Ms P Khoza Director of Civil Aviation (Executive) • Mr SS Mokoena (Non-executive) – Reappointed: Chairperson as appointed by the interim Board • Prof. NV Dyani- (Non-executive) – Reappointed New Board composition Mhango • Mr M India (Non-executive) – Reappointed • Mr S Sooklal (Non-executive) – New • Mr E Khosa (Non-executive) – New 50% • Dr BC Suckling (Non-executive) – New • Ms T Phewa (Non-executive) – New • Ms P Khoza Director of Civil Aviation (Executive) 50%
Interim Board composition
Males Females 62.5% All the above non-executive Directors are independent and appointed for a term of three years. Most importantly, in this regard there has also been an element of continuity in terms of the number of reappointments.
37.5% The Director of Civil Aviation, Ms Poppy Khoza, is the only Executive Director. Her contract, which spans five (5) years came to an end on 30 November 2018. The Minister of Transport renewed Ms Khoza’s contract for a further five (5) years effective 01 December 2018.
Males Females
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The roles of the Chairperson of the Board, and the Director of strategic objectives approved by the Executive Authority. A mix Civil Aviation are kept separate and distinct. Mr E Khosa was of skills helps to facilitate sound decision-making and enriches appointed as an independent, non-executive Chairperson by the discussions and deliberations at Board and Committee the Minister of Transport; and is free from any conflict of interest. meetings.
The Board goes a long way in ensuring proper and seamless A total of nine (9) Board meetings were held in the year under achievement of the regulatory mandate of the entity as review. The next tables delineate the composition of the SACAA contained in the Civil Aviation Act, No. 13 of 2009 and the Board during the 2018/2019 financial year.
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COMMITTEES ARC & HRC Aviation Aviation Safety and Environment Committee and Security Aviation Committee
MEMBERSHIP OF PROFESSIONAL ASSOCIATIONS South African Institute of Chartered Accountants Independent Regulatory Board for Auditors Institute of Directors (SA) (IoDSA) Institute of Directors of South Africa (IoDSA)
BOARD DIRECTORSHIP Mobile Telephone Mobile Telephone Networks Sudan Company Limited 878 Mobile Telephone Networks Afghanistan Limited Mobile Telephone Networks Ivory Coast Mobile Telephone Networks Uganda Limited Mascom Wireless Botswana Limited Econet Wireless Citizens Limited Lunar Capital (Pty) Ltd Member of the Disciplinary Committee: Public Accountants and Auditors Board Best Infrastructure and Investments CC (BII) Service Delivery Solutions (Pty) Ltd (SDS) Minerals and Petroleum Board (MPB)
AREA OF EXPERTISE Finance Tax Risk Management Corporate Governance Due Diligence Reviews Assurance (Internal and External) Mergers and Acquisition Listing and Delisting of companies on the JSE Regulatory Energy Infrastructure Policy and Regulation Engineering and Governance
QUALIFICATIONS Post Graduate Diploma: Taxation Public Accountants’ and Auditors’ Board Examinations Chartered Accountant (SA) Accounting and Diploma: Auditing (Post Graduate) Bachelor of Commerce BSc (Engineering) MBA Government Certificate of Competency as Electrical Engineer for the Mines & (GCC) in SA Works
DATE RETIRED - 30/09/18
DATE APPOINTED 01/04/18 Re-appointed 01/04/18
DESIGNATION Non-Executive Director/ Member Chairperson of the Audit and Risk Committee (ARC) Non-Executive Director/ Member of the interim Board Chairperson of the interim Board - as appointed by the interim Board
NAME Mr S Sooklal Mr SS Mokoena Interim Board composition effective 01 April 2018 composition effective Interim Board
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COMMITTEES ASEC & POC POC, ARC POC, & ASC HRC, ARC & POC
MEMBERSHIP OF PROFESSIONAL ASSOCIATIONS None Institute of Directors of South Africa (IoDSA) Rixaka Forum Institute of Directors of South Africa (IoDSA)
BOARD DIRECTORSHIP None None Mavone Forensics Shipoyilla Khosa Associates
AREA OF EXPERTISE Aviation Aviation Flight Operations and Airports Law Legal Development Finance Realignment of organisations Compliance Management Organisational and Development
QUALIFICATIONS B.Iuris MBA DBA African Qualification South Authority-Rated Assessor Auditor IATA–IOSA Airport Runway IFALPA: and Airport Safety Representative Family and Divorce Mediation LLB ALTP ICAO Subject Matter Expert Commercial Mediation Advocate of the Admitted Africa High Court, South LLB LLM LLD Associate Professor of Law PhD (Management) In progress Higher Diploma: Company Law Master of Science (International Development) Master of Arts (Development) Honours B.A Humanities B.A C O NT I N UED
DATE RETIRED - - -
DATE APPOINTED 01/04/18 Re- appointed 01/04/18 01/04/18
DESIGNATION Non-Executive Director/Member Chairperson of the Safety Aviation and Environmental Committee (ASEC) Non-Executive Director/Member Chairperson of the Procurement Oversight Committee (POC) Non-Executive Director/Member Chairperson of the Human Resources and Remuneration Committee (HRC)
NAME Dr BC Suckling Prof. NV Dyani-Mhango Mr E Khosa Interim Board composition effective 01 April 2018 | composition effective Interim Board
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COMMITTEES HRC & ASEC ASC & POC
MEMBERSHIP OF PROFESSIONAL ASSOCIATIONS None Institute of Directors South Africa (IoDSA) Former SA Representative of the AvSec Panel of Experts of ICAO, a United Nations Specialised Agency
BOARD DIRECTORSHIP None National Incomar Aerospace and Defence Systems South African National Parks (SANPARKS) Safety at Sports and Recreation Events Appeal Board (SASREA) Skymore Defence Systems Evilox Holdings Evilox Security Risk Company Inala Technologies
AREA OF EXPERTISE Research: Policy and Strategy Development Aviation Aviation Security Aviation
QUALIFICATIONS Diploma in Airport Management Managing Integrated Development Service Delivery in Rural Development MA Honours: B Social Science, majored in Sociology B Social Science, majored in Sociology and Political Science National Diploma in Security Risk Management Diploma in Aviation Security Management Project Management Certificate Programme in Economics and Public Finance Disaster and Communication Management Certificate Aviation Certificate in the Leaders Programme in Public Policy - Singapore Academy Aviation Former Military/Defence/ Police Officer C O NT I N UED
DATE RETIRED - -
DATE APPOINTED 01/04/18 Reappointed 01/04/18
DESIGNATION Non- Executive Director/ Member Employee of the Department of Transport Non- Executive Director/ Member Chairperson of the Aviation Security Committee (ASC)
NAME Ms T Phewa Mr M India Interim Board composition effective 01 April 2018 | composition effective Interim Board
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COMMITTEES Invitee: ARC, HRC, ASEC & ASC
MEMBERSHIP OF PROFESSIONAL ASSOCIATIONS Institute of Directors of South Africa (IoDSA)
BOARD DIRECTORSHIP Chairperson of the Aviation ICAO Security Panel 2015/2016
AREA OF EXPERTISE Leadership and Aviation
QUALIFICATIONS C O NT I N UED B Management and Advanced B Management and Business Programme International Executive Development Programme (Wits and London Business School) International Visitor’s Programme (USA) Chief Executive Aviation Civil Programme Certificate Academy) Aviation (Singapore Aviation Safety for Certificate in Directors-General (Singapore Academy with ICAO) Aviation Civil Aviation Various Certificates from ICAO and IATA Tourism Travel and Certificate in Certificate in Emerging Management Programme
DATE RETIRED -
DATE APPOINTED 01/11/2013
DESIGNATION Executive Director Director of Civil Aviation
NAME Ms P Khoza Ms P Interim Board composition effective 01 April 2018 | composition effective Interim Board
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OTHER COMMITTEES HRC & ASEC ARC & ASC None
MEMBERSHIP OF PROFESSIONAL ASSOCIATION Institute of Directors of South Africa (IoDSA) Institute of Directors of South Africa (IoDSA) Former SA Representative of Panel of AvSec Experts of ICAO, a United Nations Specialised Agency Former Chairperson of the SADC Aviation Group Working Institute of Directors of South Africa (IoDSA) Rixaka Forum
BOARD DIRECTORSHIP None Incomar Aerospace Defence Systems Evilox Holdings Evilox Security Risk Company Inala Technologies Mavone Forensics Shipoyila Khosa Associates
AREA OF EXPERTISE Legal Aviation Security Aviation Development Finance Realignment of Organisations Compliance Management Organisational Development
QUALIFICATIONS C O NT I N UED | LLB LLM LLD Associate Professor of Law National Diploma in Security Risk Management Security Aviation Diploma in Management Project Management Certificate Programme in Economics and Public Finance Disaster and Communication Management Certificate Aviation Leaders Certificate in the Programme in Public Policy – Academy Singapore Aviation Former Military/ Defence/ Police Officer PhD (Management) In progress Higher Diploma: Company Law Master of Science (International Development) Arts (Development) Master of Honours BA Humanities BA - - DATE RETIRED -
DATE APPOINTED Reappointed 01/12/ 2018 Reappointed 01/12/ 2018 Reappointed 01/12/2018
DESIGNATION Non-Executive Director (NED) / Member Non-Executive Director (NED) / Member Chairperson of the Aviation Security Committee (ASC) Non-Executive Director (NED) / Member Chairperson of the Board
NAME OF BOARD MEMBER Prof. N Dyani- Mhango Mr M India Mr E Khosa Board appointed 01 December 2018 S acaa Board
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OTHER OTHER COMMITTEES COMMITTEES HRC & ASEC ARC & ASC None ARC & HRC ASEC & ARC
MEMBERSHIP OF MEMBERSHIP OF PROFESSIONAL PROFESSIONAL ASSOCIATION ASSOCIATION Institute of Directors of South Africa (IoDSA) Institute of Directors of South Africa (IoDSA) Former SA Representative of Panel of AvSec Experts of ICAO, a United Nations Specialised Agency Former Chairperson of the SADC Aviation Group Working Institute of Directors of South Africa (IoDSA) Rixaka Forum South African Institute of Chartered Accountants Independent Regulatory Board for Auditors Institute of Directors of South Africa (IoDSA) Institute of Directors of South Africa (IoDSA)
BOARD BOARD DIRECTORSHIP DIRECTORSHIP None Incomar Aerospace Defence Systems Evilox Holdings Evilox Security Risk Company Inala Technologies Mavone Forensics Shipoyila Khosa Associates Mobile Telephone Mobile Telephone Networks Sudan Company Limited 878 Mobile Telephone Networks Afghanistan Limited Mobile Telephone Networks Ivory Coast Mobile Telephone Networks Uganda Limited Mascom Wireless Botswana Limited Econet Wireless Citizens Limited Lunar Capital (Pty) Ltd Member of the Disciplinary Committee: Independent Regulatory Board of Auditors Transnet Pension Fund Transnet (TSDBF)
AREA OF AREA OF EXPERTISE EXPERTISE Legal Aviation Security Aviation Development Finance Realignment of Organisations Compliance Management Organisational Development Finance Tax Risk Management Corporate Governance Due Diligence Reviews Assurance (Internal and External) Mergers and Acquisition Listing and Delisting of companies on the JSE Regulatory Aviation Law Aviation Flight Operations and Airports Law
QUALIFICATIONS QUALIFICATIONS C O NT I N UED | LLB LLM LLD Associate Professor of Law Post Graduate Diploma: Taxation Post Graduate Diploma: Public Accountants’ and Auditors’ Examinations Accountant (SA) Chartered Diploma: Accounting and Auditing (Post Graduate) Bachelor of Commerce National Diploma in Security Risk Management Security Aviation Diploma in Management Project Management Certificate Programme in Economics and Public Finance Disaster and Communication Management Certificate Aviation Leaders Certificate in the Programme in Public Policy – Academy Singapore Aviation Former Military/ Defence/ Police Officer B.Iuris LLB LLM MBA DBA ALTP Advocate of the High Admitted Court, South Africa Assessor Rated SAQA Auditor –IOSA IATA Airport Runway and IFALPA: Airport Safety Representative Family and Divorce Mediation ICAO Subject Matter Expert Commercial Mediation PhD (Management) In progress Higher Diploma: Company Law Master of Science (International Development) Arts (Development) Master of Honours BA Humanities BA - - - - DATE RETIRED DATE RETIRED -
DATE DATE APPOINTED APPOINTED Reappointed 01/12/ 2018 Reappointed 01/12/ 2018 Reappointed 01/12/ 2018 Reappointed 01/12/ 2018 Reappointed 01/12/2018
DESIGNATION DESIGNATION Non-Executive Director (NED) / Member Non- Executive Director (NED) / Member Chairperson of the Audit and Risk Committee (ARC) Non-Executive Director (NED) / Member Chairperson of the Aviation Security Committee (ASC) Non-Executive Director (NED) /Member Chairperson of the Aviation Safety and Environmental Committee (ASEC) Non-Executive Director (NED) / Member Chairperson of the Board
NAME OF BOARD NAME OF BOARD MEMBER MEMBER Prof. N Dyani- Mhango Mr S Sooklal Mr M India Dr BC Suckling Mr E Khosa Board appointed 01 December 2018 S acaa Board
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OTHER COMMITTEES Invitee: ARC, HRC, ASEC & ASC ASEC & ASC
MEMBERSHIP OF PROFESSIONAL ASSOCIATION Institute of Directors of South Africa (IoDSA) Institute of Directors of South Africa (IoDSA)
BOARD DIRECTORSHIP Chairperson of the ICAO Security Panel Aviation 2015/2016 Transport Education Transport Authority Training Aerospace (TETA): Chamber
AREA OF EXPERTISE Leadership and Aviation Aviation
QUALIFICATIONS C O NT I N UED | B Management and Advanced B Management and Business Programme International Executive Development Programme (Wits and London Business School) International Visitor’s Leadership Programme (USA) Chief Executive Aviation Civil Programme Certificate (Singapore Academy) Aviation Certificates Aviation Civil Various from ICAO and IATA Tourism Travel and Certificate in Women Certificate in Emerging Management Programme Diploma in Airport Management Diploma in Managing Integrated Development Service Delivery in Rural Development MA Honours: B Social Science majored in Sociology B Social Science majored in Sociology and Political Science - DATE RETIRED -
DATE APPOINTED 01/12/2013 Reappointed 1/12/2018 Reappointed 01/12/ 2018
DESIGNATION Executive Director Director of Civil Aviation (DCA) Non-Executive Director (NED) Employee of the Department of Transport
NAME OF BOARD MEMBER Ms P Khoza Ms P Ms T Phewa Board appointed 01 December 2018 S acaa Board 19: Board composition Table
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Board Committees to provide for a coordinated approach to all assurance activities; In terms of Principle 8 of the King IV Report™, the Board is • Reviewing reports from both external and internal auditors required to delegate certain functions to well-structured Board concerning the effectiveness of the internal control and Committees, but without abdicating its own responsibilities. This auditing system as well as evaluating whether the system provision is also present under section 81 of the Civil Aviation of internal control is adequate to manage critical risks; Act making the Board Committees an integral part of the SACAA • Reviewing the internal control systems and structure, governance model. They allow for more in-depth deliberation including financial controls and accounting systems, as on crucial and complex matters and enable the Board to well as evaluating whether the system of internal control is make more informed decisions on such matters, based on the adequate to manage critical risks; recommendation of its Committees. • Reviewing the activities of the internal audit function, The Board had five (5) committees at the beginning of the including its annual work programme, and consider the financial year, namely: effectiveness of the internal audit function and monitor the adherence to the annual plan; • Audit and Risk Committee; • Reviewing the enterprise-wide risks as well as the strategic • Human Resources and Remuneration Committee; risks on a quarterly basis and ensuring that risk management • Aviation Security Committee; assessments are performed on a continuous basis; • Aviation Safety and Environmental Committee; and • Reviewing of the Annual Report and consolidated Annual Financial Statements to ensure that they fairly present a • Procurement Oversight Committee. balanced assessment of the SACAA’s position, performance and prospects before recommending them to the Board for All committees operate within the framework of Board- approval; approved terms of reference, which are reviewed annually by the Committees and approved by the Board. In addition, each • Consider objectivity and independence of the external Committee has an approved annual work plan linked to its terms auditors; and of reference, the Civil Aviation Act, the PFMA and the Board • Approve the external audit fees. Performance Agreement. The Board appoints the Chairperson and members of each of the Committees. The Audit and Risk Human Resources and Remuneration Committee (ARC) members are nominated by the Board but membership is ratified annually at the Annual General Meeting Committee (AGM). The above ensures a healthy system of governance. The Human Resources and Remuneration Committee (HRC) advises the Board on human resource (HR) related matters; and During the reporting period, the Board Committees were recommends to the Board for approval all HR related policies constituted as follows: and strategic matters.
Audit and Risk Committee This Committee also provides independent and objective oversight over, amongst others, human resource issues, The Audit and Risk Committee (ARC) is a statutory Committee labour relations, collective bargaining matters, remuneration, that provides independent and objective oversight over, performance management systems, rewards strategy, retention amongst others, financial and sustainability reporting, financial policy, succession planning and any other issues relating to the management, risk management, internal controls, internal workforce of the SACAA. The HRC’s duties and responsibilities audit functions and processes, external audit, procurement are detailed in its Board-approved terms of reference. processes, combined assurance as well as information technology governance. The HRC focussed on the following activities in the year:
The members were nominated by the Board and their • Review and approval of the human resources operational appointment ratified at the Annual General Meeting (AGM) held plan. on 30 August 2018. The new ARC membership will be ratified at • Monitoring, on a quarterly basis, of the performance against the AGM to be held in August 2019 or September 2019. approved HR operational plan. • Review and recommendation to Board of the annual The ARC operates in accordance with approved terms of performance bonuses. reference and a detailed annual work plan. The following are • Review of the annual salary increases. some of the ARC responsibilities: • Review of the identified HR policies and the HRC terms of • Ensuring that a combined assurance model is applied reference.
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• Considered the draft Branding and Regional Co-operation matters; and the Board allocates the necessary funding and Strategy. mobilises resources to deal with aviation security matters, • In the interests of fair and responsible remuneration, the including audits where required. The ASC reviewed divisional revised pay scales were considered by the HRC. quarterly reports during the period under review.
Aviation Safety and Environmental Committee Procurement Oversight Committee The purpose of the Procurement Oversight Committee (POC) The Aviation Safety and Environmental Committee (ASEC) was is to advise the Board on the awarding of bids/tenders within constituted to ensure that the Board is aware of aviation safety the delegated authority of the Committee i.e. R10 million and and relevant environmental issues. It provides governance above. The POC operates in accordance with duly approved oversight on aviation safety and environmental matters and terms of reference and was previously an ad-hoc Committee of mobilises the requisite resources for safety and environmental the Board. On 01 February 2019, the Board resolved to disband matters, at a strategic level. the Committee and all responsibilities were transferred to the Audit and Risk Committee. Aviation Security Committee The role of the Aviation Security Committee (ASC) is to assist The following table indicates the attendance of committee the Board to ensure that the Board is aware of aviation security meetings for the period under review:
Board and Board Committee meetings
Committee No. of No. of Name of members Meetings meetings held members attended Audit and Risk 4 3 Mr S Sooklal (Chairperson) 4/4 Committee Prof. N Dyani-Mhango (retired on 30/09/2018) 3/3 Mr E Khosa (retired on 30/09/2018) 1/3 Mr M India (Appointed 1/02/2019) 1/1 Dr B Suckling (Appointed 1/02/2019) 1/1
Procurement 0 3 Prof. N Dyani-Mhango (Chairperson) - Oversight Mr M India - Committee * Dr B Suckling -
Human Resources 4 3 Mr E Khosa (Chairperson) (retired on 30/09/2018) 3/3 and Remuneration Mr S Sooklal 4/4 Committee Ms T Phewa (retired on 30/09/2018) 2/3 Ms B Koyana (Chairperson – appointed 01/02/2019) 1/1 Prof. N Dyani-Mhango 1/1
Aviation, 2 3 Dr B Suckling 2/2 Safety and Mr SS Mokoena (retired on 30/09/2018) 2/2 Environmental Committee Ms T Phewa 2/2
Aviation Security 2 3 Mr M India (Chairperson) 2/2 Committee Mr SS Mokoena (retired on 30/09/2018) 2/2 Prof. N Dyani-Mhango 2/2
*POC disbanded on 01 February 2019. Table 20: Board and Board Committee meetings
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Board and Board Committee meetings | CONTINUED
Board meetings & No. of No. of Name of members Meetings other session/ meetings held members attended workshops Board meetings 9 8 Mr SS Mokoena - Chairperson (retired on 30/09/2018) 7/7 Mr M India 9/9 Mr S Sooklal 9/9 Prof. N Dyani-Mhango 7/9 Mr E Khosa 9/9 Dr B Suckling 9/9 Ms B Koyana (appointed 1/12/2018) 3/3 Ms T Phewa 8/9 Ms P Khoza 9/9
Board strategy 2 8 Mr SS Mokoena 2/2 session B.Iuris Mr M India 2/2 Prof. N Dyani-Mhango 2/2 Mr S Sooklal 2/2 Mr E Khosa 2/2 Dr B Suckling 2/2 Ms T Phewa 2/2 Ms P Khoza 2/2
Ms P Khoza 2/2 Annual general 1 7 Mr SS Mokoena (Chairperson) 1/1 meeting Prof. N Dyani-Mhango 1/1 Mr E Khosa 1/1 Mr M India 1/1 Mr S Sooklal 1/1 Ms T Phewa 1/1 Ms P Khoza 1/1
Board induction 2 9 Mr SS Mokoena 1/1 Mr E Khosa 1/1 Mr S Sooklal 1/1 Prof. N Dyani-Mhango 1/1 Mr M India 1/1 Ms T Phewa 1/1 Ms B Koyana 1/1 Ms P Khoza 1/1 Dr B Suckling 1/1
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Board Remuneration
Board remuneration is determined by the Minister of Transport in accordance with the Civil Aviation Act. Board Members are paid a monthly stipend and, in addition, are remunerated for meeting attendance and preparation. Members are also reimbursed for any travel expenses incurred. Board remuneration is disclosed in the Annual Financial Statements and is summarised hereunder:
Board remuneration
Name Annual Other Other Total Remuneration Allowance Reimbursements* R R R Mr SS Mokoena3 182 655 N/A 1 184 183 839 Ms L Dlepu2 5 206 N/A 376 5 582 Mr M India 223 530 N/A 3 138 226 668 Major General NLJ Ngema2 5 206 N/A 2 300 7 506 Prof. N Dyani-Mhango 232 099 N/A 4 538 236 637 Mr S Sooklal1 288 700 N/A 7 814 296 514 Mr E Khosa1 279 741 N/A 15 389 295 130 Dr B Suckling 213 838 N/A 2 277 216 115 Ms B Koyana 75 464 N/A - 75 464
1. Fees include 15% VAT in terms of the VAT Act No. 89 of 1991. 2. Retired on 31 March 2018 and paid for March 2018 meeting in April 2018. 3. Retired on 30 September 2018.
* Reimbursement expenses are disclosed in terms of section 28(1)(4) of the PFMA as reimbursement costs paid to Board members. The costs include flights, car hire, accommodation and travel costs for all meetings of the Board and its committees.
Table 21: Board remuneration
Risk Management The SACAA ExCo, under the direction of the SACAA Board, use their knowledge of the organisation and the commercial aviation industry to formulate a five-year, roll-over strategic plan. The strategic risks to the plan are determined by considering the effect of uncertainty on the strategic objectives in the strategic plan. The Strategic Risk register process identifies and assesses possible risks associated with the strategy and provides the Board and stakeholders with a list of the top ten identified strategic risks in the SACAA, stated clearly and assessed as to their importance to meeting strategic objectives. The SACAA Board and ExCo were directly involved in creating mitigation plans to reduce the risk to acceptable levels and within the company’s risk appetite. The Board decided upon an acceptable level of risk and whether the potential gains from the strategy proposed are worth the risk. At the end of March 2019 the total residual risk exposure score decreased from nine (9) to six (6). The next table will reflect the top ten (10) strategic risks in SACAA and group them according to organisational goals.
70 Annual Report 2018 | 2019 PART C - Governance PART A General Information 4 8 6 6 4 8 6 6 6 8 Residual Risk Rating (RRR) 2 2 2 2 2 2 3 2 2 2 17 to 25 10 to 16 5 to 9 1 to 4
Likelihood 2 4 3 3 2 4 2 3 3 4
Extreme Risk High Risk Moderate Risk Low Risk Consequence Current Control Strategies Evaluation after Considering 4 16 16 16 16 16 12 20 16 20 Inherent Risk Rating (IRR) 2 4 4 4 4 4 4 5 4 5
Likelihood 2 4 4 4 4 4 3 4 4 4
Consequence Current Control Strategies Evaluation before Considering
Risk Description Limited Accessibility to services SACAA Lack of Stakeholder Buy- in Lack of Sustainable Financial Model Poor Customer Service Levels Inadequate aviation safety & security oversight system Misaligned safety and security interventions causing accelerated accident rates Lack of compliance to the BBBEE Codes Loss of Critical and Scarce Skills Lack of effective Lack of effective and efficient processes and systems Lack of Information System Security
Strategic Objective Establish Optimum Access to Regulatory Service Improve Stakeholder Perception Diversify and Expand Sources of Revenue Improve Customers’ Improve Customers’ Experience Achieve a Step- change in Regulating Safety and Aviation Security Review and Implement the and Align C-FARP to International Best Practice Accelerate Organisational Transformation Drive a Performance culture Achieve a Step- change in Regulating Safety and Aviation Security Integrated ICT Integrated ICT System
Strategic goals Increase National Footprint of Regulatory Services Effective Stakeholder Effective Management Secure Financial Sustainability Customer Service Excellence Regulate Aviation Regulate Aviation Industry and Efficiently Effectively Enhance Human Capital and Accelerate Transformation Drive Organisational System Innovation 9 8 7 6 5 4 3 2 1
Risk No. 10 Table 22: Risk register Table SACAA Strategic Risk register – as at March 2019 – as at March SACAA Strategic Risk register
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Internal control unit
The SACAA does not have an Internal Control Unit; as such by management and staff, to relevant legislation, regulations, functions and activities are dealt with by the Internal Audit approved policies and procedures, and best industry practices, Division and the Board’s Audit and Risk Committee. where applicable. Consulting services are advisory in nature and are intended to add value and improve the SACAA’s Internal Audit operations. They are generally performed at the specific request of Management and/or an engagement client. The nature and The SACAA established an Internal Audit Division in line with scope of the consulting engagement are subject to agreement the Public Finance Management Act and Treasury Regulations, with the engagement client. including the best practice of King IVTM Report on Corporate Governance. The Internal Audit Division plays a key and independent role within the organisation in assessing the adequacy and Internal Audit provides both assurance and consulting services. effectiveness of risk management, internal controls and It assists the SACAA to accomplish its objectives by bringing a governance processes. One of its functions is to ensure that systematic and disciplined approach to evaluating and improving there is improved internal controls within the organisation the effectiveness of risk management, internal control, and as well as compliance with applicable legislation. In addition, governance processes, which must be managed in a manner the Internal Audit Division constantly and regularly monitors that ensures: organisational performance to ensure that the deliverables as outlined in the Annual Performance Plan (APP) are achieved. • the effectiveness and efficiency of operations, investments and projects; Summary of Audit Work Undertaken • the safeguarding of the SACAA’s assets; The Internal Audit Charter was reviewed and approved by • the reliability and integrity of financial and non-financial the Board’s Audit and Risk Committee. The internal audit information; and methodology was revised to remain consistent and relevant to new updates of the Internal Audit Standards for the Professional • processes regarding compliance with laws and regulations. Practice of Internal Auditing. This was also aimed at ensuring that there is continuous improvement of the internal audit The work of the Internal Audit Division is guided by the Internal processes. Audit Charter, which is aligned to the Board’s Audit and Risk Committee Charter. The Internal Audit Division reports A risk-based three-year coverage plan is in the process of being functionally to the Board’s Audit and Risk Committee and developed and the Annual Plan for 2018/2019 were reviewed administratively to the Director of Civil Aviation. The Audit and and approved by the Board’s Audit and Risk Committee. The Risk Committee reviews the work of the Internal Audit Division Internal Audit Division executed and completed all the audits on a quarterly basis or as when the need arises. on the approved Internal Audit Annual Plan as approved by the Audit and Risk Committee. The progress reports against the The Internal Audit Division performs its work in line with the plans are presented monthly to ExCo and quarterly to the ARC International Standards for the Professional Practice of Internal by the Chief Audit Executive. A total of thirty-six (36) internal Auditing and Code of Ethics for Internal Auditing issued by audit reports were issued, which is a combination of planned the Institute of Internal Auditors. The Internal Audit staff are all audits (32) and ad-hoc requests (4). registered as members of the Institute of Internal Auditors. A Findings Tracking Register was developed and monitored Key Activities and Objectives of the Internal monthly for progress made by Management in implementing the agreed actions and plans. As at the end of the financial Audit Division year, eighty-one percent (81%) of the findings from the previous financial year were closed or resolved by Management, and The Internal Audit Division mainly focuses on assurance and the remaining nineteen percent (19%) is being planned to be consulting services as required by the Institute of Internal resolved in the first quarter of the 2019/2020 financial year. The Auditors’ standards. Assurance services consist of the Internal Audit Division is satisfied with the effort Management independent reviews on the adequacy and effectiveness of the has put in place in ensuring the speedy resolution of the risk management, internal control and governance processes. outstanding findings. Independent reviews include a continuous review of compliance,
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During the reporting period, a campaign aimed at amplifying It is against this background that alignment efforts are under way awareness among the SACAA’s employees regarding the role to ensure an effective combined assurance process across all and services of the Internal Audit Division was undertaken. The the SACAA operations as outlined in the Combined Assurance awareness initiatives included, among others, participation Implementation Plan. It is worth mentioning that the combined during the induction of new employees, as well as presentations assurance implementation is at an infancy stage. to Management structures, staff and during Management Committee (MANCO) meetings. The alignment effort will ensure increased collaboration and the development of a shared and holistic view of the organisation’s Audit and Risk Committee risk profile, whilst eliminating the ‘assurance fatigue’ that usually emanates from an uncoordinated assurance approach. The The Audit and Risk Committee (ARC) derives its mandate from development of the Ethics and Compliance Frameworks by the the Public Finance Management Act, 1999 (Act No. 1 of 1999) Company Secretary’s office further aids the alignment process. (PFMA) with specific reference to Section 51 of the PFMA and All the actions identified in the compliance and ethics plans, the Treasury Regulations. In terms of the above legislation, the including risk registers, will be coordinated by the SACAA’s Risk Board is required to appoint the ARC and the appointment of Specialist, and Governance Specialist to ensure value-added the members is ratified by the Executive Authority at the Annual outcomes for the SACAA. General Meeting. Quarterly Combined Assurance committee meetings are held The ARC has adopted appropriate, formal Terms of Reference to discuss implementation progress, alignment and integration. (ToRs) which are reviewed annually and approved by the Board. The Senior Manager Risk and Compliance, Risk Specialist, This ARC is independent and carries out its functions without Legal Compliance, and Governance Specialist met on 14 any influence or interventions from the Board or Management November 2018 to discuss alignment between the assurance of the SACAA. processes in the Risk and Compliance Department and the Company Secretary’s office. This resulted in a meeting on 04 Independent and objective oversight is maintained over, December 2018 between the Company Secretary, Internal Audit among others, financial and sustainability reporting, financial Division, and Risk and Compliance Department to discuss the management, risk management, the internal audit function, alignment and integration of the Fraud and Ethics Register. external audit, procurement processes, information technology, governance and integrated reporting within the SACAA. The Combined Assurance organisational awareness and readiness ARC meets at least five times a year to consider the quarterly training was undertaken as follows: financial management report, internal audit quarterly report, risk management report, performance management, external audit • Combined Assurance Core Team training: May 2018. strategy and any other statutory requirements. For more, refer • Combined Assurance Committee member training: also to the Audit and Risk Committee Report on page 104 - 107. December 2018. • Combined Assurance training for wider Management: Implementation of Combined Assurance March 2019. The SACAA’s Combined Assurance Model, which was approved by the Board on 31 October 2017, has paved the way to ensure that the model is implemented across the SACAA by following a risk-based approach. The SACAA’s combined assurance model incorporates King IV™ requirements by integrating, aligning and optimising all assurance services and functions so that, comprehensively, these enable:
• an effective control environment; • support the integrity of information used for decision-making by management, the governing body and its committees; • support the integrity of the organisation’s external reports; and • remove the unnecessary duplication of efforts by assurance providers, and as a result, the probability of assurance fatigue in the business.
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Combined Assurance Implementation Plan
The SACAA’s combined assurance programme, based on the King IV™ Report (2016) on Governance for South Africa, aims to improve assurance coverage and quality through improved coordination amongst assurance providers. The application of combined assurance in terms King IV™ implies that assurance is provided at multiple levels within the organisation and the Board of Directors does not merely receive assurance, but, in turn serves an additional assurance role, especially in consideration of stakeholder and shareholder interests. The focus of the programme thus lies on the harmonisation (organisation, processes, and terminologies) and efficient utilisation of the different assurance functions to provide holistic, rather than fragmented assurance to key stakeholders. To operationalise this, the combined assurance implementation plan, below, was developed.
The implementation of combined assurance will be performed in a multi-year, staged manner, as outlined in the table below.
No Implementation Action Timelines and Responsibility Financial Year Responsible Progress 17/18 18/19 19/20 Immediate Priority Items 1 Approved combined X E: CS Updated Combined Assurance framework assurance framework circulated to committee for comments. 2 Approved combined X CA Committee Combined Assurance matrix circulated to assurance matrix committee for comments. Pre-implementation Actions 3 Revised CA Committee X CA Committee Revised CA ToR was approved. terms of reference (ToR) 4 CA training X X E: CS • Training for CA Core Team took place in May 2018. • CA training for Combined Assurance Committee members took place on 13 December 2018. • Combined Assurance training for Management was concluded on 27 March 2019 during MANCO. 5 Ensure alignment and X X E: CS & CAE Review of Risk Governance documents and consideration of CA alignment thereof with key charters of SACAA is plan in risk governance under way. documents and key charters of SACAA Implementation Actions 6 Integration and X X X Company • Quarterly during CACom meetings based on Alignment between Lines Secretary manual processes. of Assurance. • Meeting between SM: R&C and Legal Compliance and Governance Specialist to discuss CA model on 14 November 2018. • Meeting was held between Company Secretary, Internal Audit and R&C to discuss the alignment and combination of the Fraud and Ethics Register on 4 December 2018. 7 CA coordination and X X X CA Committee Planned CACom dates. ongoing monitoring • 1st Quarter: 30 Jul 2018. • 2nd Quarter: 26 Sep 2018. • 3rd Quarter: 21 Nov 2018.
Table 23: Combined Assurance Implementation
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The reporting and investigation of incidents is supported Ethics by Management’s commitment to fully implement the recommendations contained in the Forensic Investigations Compliance with laws and regulations Reports. During the reporting period an implementation rate of 77% was attained, compared to 100% achievement in the previous In terms of the King IV Report™, the Board is required to ensure financial year. The outstanding 23% is attributed to disciplinary that the SACAA complies with applicable laws and considers hearings that have been initiated and are still in progress. adherence to non-binding rules, codes and standards. This has remained an ethical imperative for the Board and the SACAA. The work done to manage and/or reduce fraud and corruption Quarterly reporting on compliance with the PFMA, as well as has provided the Audit and Risk Committee as well as the Board international codes and standards, has been ongoing. with the required level of assurance that the risk associated with fraud, corruption, and maladministration is being managed During the year under review, the Board approved the effectively by the SACAA. The Board’s Audit and Risk Committee compliance policy, which included the regulatory universe. The as well as Management has directed the Forensic Department policy was aligned with the King IV Report™ and the relevant to initiate Fraud Deep Dive processes. The Fraud Deep Dive compliance standard. processes will focus on specific acts of fraud, corruption, and maladministration in the following high-risk areas: Management of fraud and corruption • Employee Benefits; The Fraud and Corruption Prevention Framework as previously approved by the Board has been implemented by the SACAA. The • Recruitment; implementation of the Framework was supported by the review • Procurement; of the Whistle-Blowing Policy, which review was necessitated by the promulgation of the Protected Disclosure Amendment Act. • Petty Cash and Subsistence Claims; In the reviewed policy, the SACAA strengthened the protection • Credit Cards; and of the whistle-blower, which includes persons employed by the organisations, or those providing services to SACAA, such • User Fees (Inspections and Examinations). as security, cleaning, and catering companies. In addition, as required by the Protected Disclosure Amendment Act, the The Deep Dive Project would commence during the 2019/2020 SACAA introduced provisions to give effect to disciplinary or financial year and it is in line with Management’s commitment criminal actions against persons that knowingly make false to be proactive in respect of preventing fraud, corruption and reporting. maladministration. Whilst the Fraud Hotline provides a facility where stakeholders can report known or suspected incidents The amended Whistle-Blowing Policy followed the continuous of fraud, corruption, and maladministration; Management took efforts by Management to create awareness of the Fraud Hotline a decision to dive into those high-risk areas to determine the as a tool and/or mechanism to reduce fraud and corruption within presence or otherwise of fraud, corruption, and maladministration. the aviation industry. In this reporting period, Management took a strategic approach to focus on external stakeholders, during Management is satisfied that sufficient assurance has been which the following events were undertaken: provided and accepted by the Audit and Risk Committee as • Ethics Day targeting the SACAA’s walk-in clients; well as the Board, that potential incidents relating to fraud, corruption, and irregularities are being well managed within the • Presentation on fraud and corruption during the SACAA’s organisation. National Civil Aviation Conference; • Presentation on fraud and corruption during the General Minimising conflict of interest Aviation safety campaign roadshows; and • Presentation on fraud and corruption during the Aero Club Conflict of interest is managed through mandatory annual of South Africa roadshows. declarations of interest by all employees. This is over and above the requirement that employees disclose matters of conflict of Management continued to monitor several forensic investigations interest; as and when they arise. During the year under review that were conducted; and expedited the implementation of the the Board ensured compliance to the conflict of interest policy. recommendations made by the SACAA’s Forensic Department, The Policy ensures alignment with the Civil Aviation Act and best as well as incidents reported through the Fraud Hotline. A total practice in terms of dealing with conflict of interest. During the number of 58 incidents were reported in the current financial 2017/2018 financial year, the SACAA introduced an automated year compared to 50 in the previous financial year, translating system in respect of the declaration of interest in an effort to into a 16% percentage increase. enhance the process.
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The declarations are verified by the Internal Audit department for reinforcing the SACAA values and that the ethical tone is indeed validity, accuracy and completeness, and where discrepancies set at the top. To further give effect to the King IV™ ethics exist, such discrepancies are subjected to a full forensic outcome, the Board delegated the oversight of ethics to the investigation. The Internal Audit Division has the mandate Human Resources and Remuneration Committee to ensure a to conduct lifestyle audits at any given moment where they more dedicated focus on ethics. deem it appropriate on all Divisions, including Supply Chain Management (SCM). In addition, all employees within the SCM Moreover, and during the year ahead, an ethics survey will be department are vetted annually to manage issues of conflict. conducted in the latter part of 2019/2020, which will also reveal any further improvements in terms of fully embedding the ethics All Board members are required to declare any conflict of practices at the SACAA. interest on an on-going basis. The Board Charter, read together with section 84 of the Civil Aviation Act, details the importance of Health, safety and environmental matters declaring conflict of interest and contains prescripts for dealing with such conflicts. In relation to health, safety and environmental matters; the SACAA can be described as a medium-risk organisation with Code of conduct (Ethics) a positive health and safety culture. The organisation places a high premium on the wellbeing of its employees. In this regard, The Board approved the Ethics Policy and the Code of Conduct the organisation has an effective health and safety management in March 2018. These policies enlist the ethical principles that system in place to ensure the continued health, safety, welfare are envisaged at the SACAA for its Directors, employees and and development of its staff. The health and safety management contractors; and are linked to the values adopted by the Board, system duly meets recognised standards and is backed by which seek to also provide guidance and ensure that an ethical effective policies and procedures. culture is inculcated not only within the organisation but in the aviation industry as well. These principles govern relationships The Health and Safety Unit successfully discharged its among different role players and they are meant to foster a good duties in line with its annual performance plan by performing ethical working relationship and environment. To give effect to the planned audits and inspections; as well as continuous the Ethics Policy and Code of Conduct, a plan was developed organisation-wide occupational health and safety hazard and implemented so as to entrench an ethical culture. As part identification and risk assessments. These included audits of the ethics awareness campaign, training sessions on the of the offices in Cape Town, RAASA offices, and Lanseria Ethics Policy and Code of Conduct gained traction during the operations. The Occupational Health and Safety policy were reporting period. The ethics function resides within the Office reviewed during the reporting period. of the Company Secretary and it is through this function that Management has engaged employees in its quest to educate The Health and Safety Unit also offered continuous training and instill sound ethical conduct. and capacity-building for the occupational health and safety representatives and now have an active contingent of sixteen The SACAA held an Ethics Day in February 2019, where trained Occupational Health and Safety (OHS) representatives. employees were encouraged to come and interact with the ethics Two emergency evacuation procedure tests were successfully and fraud prevention team, as well as the representative from concluded during the reporting period. Moreover, the SACAA the service provider hosting the Fraud Hotline. The exercise was issued with a Letter of Good Standing by the Department proved useful in that it provided employees with an opportunity to of Labour’s Compensation Commissioner. Regardless, in converse about acceptable behaviour involving, amongst others, the coming financial year, the Health and Safety Unit intends ethics in general, the gifts register process, and conflict of interest. to intensify awareness across the organisation in relation to A platform has now been created to take the ethics awareness occupational health and safety. to greater depth and it is now necessary to customise training for the various divisions such as Supply Chain Management and The number of on-duty incidents shows a one-digit decrease those divisions with an Inspectorate. An Ethics Handbook was during the reporting period; compared to the 2017/2018 developed for employees to have a quick reference point and the financial year. As the next table illustrates, there were three SACAA pledge printed on desk mats distributed to employees minor injuries during the 2017/2018 financial year compared which serve as a constant reminder of the ethics commitment. to two minor injury cases reposted during this review period. Encouragingly, during this reporting period there were no fatal The tone from the top has also been key at the SACAA in that injuries, dangerous occurrences, or ill health cases. The two ethics messages in the form of electronic video messages from minor injury cases were first aid incidents that were treated on the Chairperson of the Board, and the DCA, were sent to all site and duly recorded internally and in line with the applicable employees and plighted in the Client Services area, thereby processes.
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Two-year comparison of reported injuries on duty
Category of injury Period Period 2017/2018 2018/2019 Fatal 0 0 Minor injury 3 2 Major injury 0 0 Dangerous occurrence 0 0 Ill health 1 0 Total reports 4 2
Table 24: Two-year comparison of reported injuries on duty
Company Secretary Social responsibility
The Board continues to be supported by a competent Company As a good corporate citizen, it is important for the SACAA Secretary. Amongst other duties, the office of the Company to make a difference in the lives of the communities the Secretary plays an instrumental role in advising the Board on organisation serves, directly or indirectly. The organisation its roles and responsibilities. The roles and responsibilities of is committed towards supporting causes beyond its mandate the Company Secretary are defined in the Board Charter, read of controlling, promoting, regulating, supporting, developing, together with the King IV report™; and the Company Secretary enforcing and continuously improving levels of safety and is evaluated as part of the Board Evaluation. The Directors have security in the civil aviation industry. By playing a proactive full access to the services and advice of the Company Secretary role in contributing towards the needs of the industry and and all information and records necessary to discharge their communities it serves, the SACAA brand and profile will grow duties. In addition, the Board of Directors have access to the in prominence and reputation and the organisation will fulfill services of independent professionals and advisors where its role as a socially responsible citizen. The SACAA has also necessary; and such advices are obtained in accordance put emphasis on exploring transformation-related initiatives in with the Board approved process. The Company Secretary order to address the imbalances of the past as well as tackle maintains an arm’s length relationship with the Board and its the triple challenges of poverty, inequality, and unemployment Directors. The Company Secretary is also empowered with the through its socio-economic development (SED) projects. necessary authority and support to carry out her duties, which include, among others: Sponsorships
• Maintaining all statutory records; The following sponsorship commitments were entered into • Reviewing all Board and Committee Charters annually; during the reporting period: • Assisting the Chairperson with the Board Evaluation; Standard Bank Empowerment Awards • Advising the Board on business ethics and good governance; The SACAA sponsored the Standard Bank Empowerment • Ensuring that the Board’s policies and instructions are Awards to the value of R150 000 and as part of this sponsorship communicated to the appropriate persons in the SACAA; the SACAA sponsored the Women in Aviation Award where • Ensuring that the Board receives adequate information in the DCA had the honour of presenting this award to the order to make informed decisions; winner. The ceremony was held at the Emperors Palace on • Ensuring Board induction, training and development; 23 August 2018. The award was won by Ms Refilwe Ledwaba • Monitoring of legislative compliance; and from Women and Aviation. This commitment does not just contribute towards the elevation of the SACAA brand but also • Implementing the ethics programme. cements the organisation’s goal of contributing towards the empowerment of women in the aviation industry.
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AASA AGM and Conference of Transport. The Department of Transport’s Imbizo event took place on 15 - 16 March 2019. The total cost of the donation was The Airlines Association of Southern Africa (AASA) is one of R273 150. the key stakeholders of the SACAA whose activities contribute towards the SACAA revenue in the form of the Passenger Safety Charge and the fuel levy. It is therefore critical for the SACAA to maintain a working relationship that is mutually beneficial for both parties.
The SACAA’s sponsorship towards the AASA Annual General Meeting (AGM) and conference not only improves the relationship between the two parties, but also ensures that the SACAA is well informed about the topical issues of this key stakeholder, so that the Regulator can be responsive to their needs in line with its mandate.
The sponsorship value was R100 000 and it included branding opportunities for the organisation, an exhibition space and hosting the welcoming reception. There was also an opportunity for the Regulator to engage and network with members of the airline industry. The DCA was listed as a panellist in the programme and represented the Minister by delivering the keynote address. The AASA (AGM) was held in October 2018. Safety First Campaign Avi Afrique Summit The Safety First campaign was launched several years ago as a multi-stakeholder campaign whose aim is to promote safety A bronze sponsorship package was purchased to the value of amongst aviators. The SACAA is a major contributor towards R75 000 in support of the Air Traffic and Navigation Services’ the project together with various industry players such as the (ATNS) Avi Afrique Summit, which took place in October 2018. Aero Club of South Africa, Comair, the Commercial Aviation The SACAA sponsorship at the summit was an opportunity Association of South Africa, and several others. The SACAA to strengthen a mutual stakeholder relationship with ATNS contribution amounts to R120 000 annually. The funds are used and increase the SACAA’s brand visibility among key industry towards, among others, hosting safety talks, and developing players. safety material, including videos. Road Safety Child-Headed Households initiative BARSA Aviation Summit
As part of the SED plan, the organisation partnered with The organisation responded to a request for sponsorship from the Department of Transport in a road safety child-headed the Board of Airlines Representatives of South Africa (BARSA) households initiative. The sponsorship includes 250 blankets, towards the annual summit hosted by the same organisation. 250 food packs, 15 school jerseys and 15 school shoes at a cost BARSA is one of the major stakeholders of the organisation, of R151 504. The sponsored items were distributed to families representing foreign airlines operating in South Africa. The who are part of the Road Safety child-headed household Edu value of the sponsorship was R50 000 and the benefits of the care Initiative. sponsorship included brand exposure at the event and the opportunity to exhibit at the Summit. The theme of the summit Department of Transport Imbizo held on 28 February 2019 was “Collaborate-Innovate-Disrupt – Propel to 2020”. The organisation partnered with the Ministry of Transport to hand out groceries to communities in the Vryheid area during a DoT Imbizo initiative. The project, amongst other activities, Donations also engaged the communities on services offered by the Donations of 500 school bags and water bottles were committed Department of Transport. to the Aviation Development Africa expo held in Soweto. The expo is an initiative by a group of aviators who identified a need Two hundred (200) grocery packs were purchased and in the area for awareness, and raised funds to host a career delivered in response to a request from the office of the Minister expo.
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Corporate Social Investment - Responsibility #AviationYouthShow
Projects The CSI Unit in collaboration with the Aviation Development SACAA Child/Youth headed household grocery project Unit organised and hosted the Aviation Youth Show in commemoration of Youth Month on 15 June 2018 in Mhinga The Child-Headed Household initiative was identified as one of village, Limpopo Province. The youth show was an idea the SACAA’s SED projects in response to the need identified borne out of a request received from the Principal of Basopa amongst many communities where future aviators come from. Secondary School in Maphophe Village in Limpopo who got The project covers all nine provinces in the country and the to know about the SACAA through one of the school visits families were identified by the members of staff and in some conducted by the SACAA’s Aviation Development team, at a provinces through the Department of Social Development. A due village close to Mhinga. The request was for the SACAA to host diligence exercise was undertaken to ensure that the families an Aviation Day for the Vhembe District, Malamulele North East are deserving, and verification was conducted with the help of Circuit, which has ten (10) secondary schools offering learners the Department of Social Development. Mathematics and Science, key subjects required for most of the aviation careers. The community is also aspiring to develop an To ensure the sustainability of this project, the SACAA conducts existing military airport nearby, to be commercially viable as one periodic visits to the families to ensure and measure the impact of their socio-economic development projects. of the support. The economic status of the families vary and in some cases the extended families also offer support, which The show was thus hosted at the Joseph Rangani High School then has an impact on the decision to either identify new needy in Mhinga Village with over 180 learners, and had 17 educators families or offering different types of assistance to the families. in attendance. The show was opened by inspirational messages Due to the fact that the recipients of the support are mostly from the Executive: Aviation Security; the Chief of Mhinga children or youth, the needs would be more than just food, but Village, and the Head of the District’s Education Department. also school equipment or facilities. During the reporting period, Thereafter, the day proceeded with interactive displays and site visits were conducted with the families in six (6) of the information sessions from the following exhibiting companies: provinces; and status reports were requested from the Social Development colleagues in relation to those provinces that the • The South African Airways who afforded all 181 learners a SACAA team could not reach. simulated aircraft experience in their Vulindlela simulator truck. #Mandela100SACAAChallenge • Denel Aviation who displayed their model defence equipment and handed out to each learner a comprehensive A Divisional challenge was launched in support and information booklet titled “Defense Made Easy”, written for commemoration of the Mandela Centenary. The challenge for the South African learner. each SACAA Division was to select a charity of their choice, with the proviso that priority must be given to charities focusing on • Gateway Airports Authority Limited (GAAL) representing women, children, and STEM (Science, Technology, Engineering Polokwane Airport, Air Traffic and Navigation Services and Mathematics). Secondly, Divisions needed to identify (ATNS) and the South African Air Force presented related beneficial items they could raise for the chosen charities. The careers at their stands. Divisions were then expected to go on a drive to raise these • The SACAA team comprising of: funds for the items, buy the items, and donate them to the identified charities on 18 July 2018. The Division that collected • The Aviation Infrastructure department showcased the highest number of items in value or quantity for their charity, calibration equipment and cartography on screen, would win R5 000 for their charity of choice. giving the learners a glimpse into the untold careers in aviation. The SACAA’s Finance Division selected Tumelo Home, which • The Aviation Security division featured interesting provides care for mentally and physically ill citizens in the area security devices used by airports security. of Tembisa, Gauteng. The Division managed to collect over 200 toiletry items such as toothpaste, soap, etc. • The SACAA Communications Department’s interns and the SACAA’s young pilot, Rebaone Maropefela, The Corporate Services division nominated Home of Hope, were flooded by learners at every chance they got, to a charity that houses over 300 girls who were exploited and view and try out the science experiments that were abused and offers care and a safe environment to them in order being showcased. to restore their dignity and hope for the future. Most of these girls were rescued from the pimps in Hillbrow. The division elected to raise sanitary towels and exceeded their target.
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Young African Aviators and SACAA bursary recipients shared technology, collapsing borders through sustainable, innovative their success stories during the “Up-close and personal with an problem-solving approaches and participating in the global aviator” session. Learners could not wait for “selfie” moments village as an equal partner. with the young pilots after hearing their inspirational “I DID IT, YOU TOO CAN” stories. The climb is in honour of the African child of today and tomorrow, it is a message to an African child: Nine (9) learners got to experience what flying was like when they had an opportunity to go on a light airplane flip with the local Chief. “you can reach greater heights because there is no The show was not only informative but also gave learners from mountain that is too high for you!!!” Mhinga village an unforgettable experience that cost the SACAA just under R150 000 to host, with most of the cost accounted to Maths and Science Programme travel expenses of technical and event logistics teams, as well as promotional gifts given to learners. The learner packs included a The organisation identified a Maths and Science tutoring branded “upcoming aviator” back pack and a T-shirt. programme as one vehicle that would contribute towards building a pipeline of young future aviators. The aim of this project is to #Africa40440 directly contribute towards the transformation of the civil aviation industry by building a pipeline of young learners who can readily The SACAA advocates for women empowerment and for women and successfully take up careers in aviation. The programme is who strive to succeed against all odds. The organisation invested meant to provide a solid understanding of Maths and Science, R320 000 in support of the #Africa40440 campaign Kilimanjaro as this is the main requirements for future engineers and pilots. Climb. The #Africa40440 campaign was led by Masingita The programme will also ensure that learners participating in Masunga, the first woman living with Cerebral Palsy, attempting the programme will produce strong matric results, thereby to summit Mount Kilimanjaro. She summited Mount Kilimanjaro standing a good chance of getting bursaries and being accepted on 16 June (Youth Day in South Africa and UN declared day of for aviation-related careers. The aim is also to create a feeder the African child) 2018 together with seven others. The climb is programme of learners that may be targeted for the SACAA one of the 40 initiatives of the #Africa40440 campaign, launched Bursary Programme. The organisation will build a long-term as a fundraising vehicle for the establishment of the African relationship with the products of this programme. Should the Dream Village through 40 worthy initiatives to impact lives on programme become a success, it will be rolled out in all the the continent. provinces; however, as a start, the organisation has partnered with a Gauteng-based Non-Governmental Organisation (NGO). The African Dream Village will be established as a learning institution, geared towards the decolonisation of education and The Director of Civil Aviation approved the motivation to systems. It will benefit the needs of our continent economically establish a Maths and Science Programme for the SACAA. The and socially, building confidence through an education estimated budget for the rolling out of the programme in the new programme that celebrates African science, history and financial year is R750 000.
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Transformation and career awareness activities
In a quest to mitigate the slow pace of transformation in the aviation industry, the SACAA has adopted a multi-pronged approach that includes, among others, a career awareness programme. Other initiatives include financial aid for training, as well as the implementation of skills programmes. These are outlined in detail under the Human Resources section of this annual report. The schools outreach programme is critical in exposing historically disadvantaged individuals to careers in aviation. During the year under review, the SACAA visited 568 schools in the nine (9) provinces, which resulted in an interaction with 49 858 learners. Most of the schools visited are based in the remote rural areas.
Aviation Development School Career Awareness Programme: 01 April 2018 - 31 March 2019
Polokwane: 16-20 Apr ‘18 92 7 625 Mhinga Village: 15 Jun ‘18 10 250 Quarter 1 Pretoria (Zwartkop Air Show): 04-05 May ‘18 14 1 000 Limpopo Kempton Park (SAA Youth Summit): 11 Jun ‘18 08 400 Nkomazi: 25 May ‘18 02 2 500 Mpumalanga Gauteng North West Malelane: 07-12 May ‘18 15 2 963
Free State KwaZulu-Natal
Danhauser and Utrecht: Northern Cape 01-07 Jun ‘18 12 894
Eastern Cape Matatiele: 16-20 Apr ‘18 10 2 006
Western Cape Mthatha (Mthatha Air Show): 30 Jun ‘18 10 1 000
Langa, Groenvlei and Athlone: 23-27 Apr ‘18 10 876 Sub-Total Quarter 1 Number of Schools
183 19 514 Number of Learners
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Aviation Development School Career Awareness Programme: 01 April 2018 - 31 March 2019
Pretoria: 19-23 Sep ‘18 100 9 500 Lephalale: 07 Sep ‘18 22 899 Quarter 2 Orange Farm: 03-11 Sep ‘18 12 1 843
Johannesburg: 21 Sep ‘18 10 250 Limpopo
Masemola: 30 Jul – Westonaria: 21 Jul ‘18 03 Aug ‘18 16 875 15 1 675
Mpumalanga Gauteng Belfast: 16-18 Aug ‘18 North West 06 400
Pongola: 20-24 Aug ‘18 Free State KwaZulu-Natal 15 1 400
Northern Cape Fouriesburg, Clarens: 19-23 Sep ‘18 12 1 575
Eastern Cape
Western Cape Queenstown: 01-04 Jul ‘18 10 250
Sub-Total Quarter 2 Number of Schools 218 18 667 Number of Learners
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Aviation Development School Career Awareness Programme: 01 April 2018 - 31 March 2019
Capricorn North: Moloto, Moletjie, Maleboho, Bochum, Bahlaloga: 04-08 Mar ‘19 13 1294 Quarter 3 & 4 Midrand: 27 Feb ‘19 03 27
Newtown: 22-26 Oct ‘18 Limpopo 10 750
Benoni: 05 Oct ‘18 - 45 Nelspruit: 07-08 Dec ‘18 Mpumalanga 47 1 350 Gauteng North West
Free State KwaZulu-Natal
Mkomaas, Mzinto, and Mtwalume: Northern Cape 25 Feb – 01 Mar ‘19 12 613
Lejweleputswa: 18-21 Feb ‘19 60 4 758 Eastern Cape
Khayelitsha: 27 Oct ‘18 Western Cape - 07
West Coast Schools & Bonteheuwel: 04-09 Feb ‘19 22 2 828
Stellenbosch: 03 Nov ‘18 - 05 Sub-Total Quarter 3 Number of Schools 57 2 157 Number of Learners
Unregistered Schools Sub-Total Quarter 4 110 9 520
Sub-Total - 57
Totals Table 18: School career awareness programme 568 49 858
Annual Report 2018 | 2019 83 PART Human Resources PART D - Human Resources PART A General Information
Overview of human resources matters
The Human Resource Division (HRD) is responsible for and it is pleasing to report that Senior Managers and Middle managing all employee-related matters and programmes. Managers completed their respective programmes. The Executive These include, among others, policy administration, team will be completing their programme in the 2019/2020 recruitment, the administration of employee benefits, skills financial year. In addition to the leadership programme, development as well as talent management. The HR Division is Executives and Senior Managers went through an individual also responsible for leadership development, performance leadership coaching programme. Moreover, the Executive team management, organisational culture alignment, the management undertook a group coaching programme. of employee rewards and recognition, employee wellness, the management of the employee value proposition, as well as the Organisational Culture management of the bursary, internship and trainee development programmes. The SACAA prides itself for continuing to implement The focus in this financial year was on the implementation of best-practice HR programmes in order to attract and sustain a the culture harmonisation and institutionalisation programme high-performing workforce and to retain the best talent. aimed at the alignment of the current and the desired culture. The implementation incorporated the development and Performance Management implementation culture guide, culture workshops and alignment of HR programmes such as induction, awards and recognition. The SACAA continues to drive a high-performance culture through The implementation was underpinned by a robust change its mature performance management system, which cascades programme, which will continue into the new financial year. and ties strategic goals with the divisional, departmental, and employees’ objectives. This automated performance management Talent Management system has the capability of monitoring performance management through the reports that give insights into performance in the The SACAA has adopted an integrated talent management organisation. The full usage will be realised in 2019/2020. strategy, which is aimed at creating an environment where talent in the organisation is developed and remains engaged. Leadership Development In this regard, the various SACAA divisions focused on the implementation of talent engagement plans, which form part of The focus during the 2018/2019 financial year was on the institutionalisation of the talent engagement initiatives. the implementation of the three-tier leadership development programme. All levels of leadership went through the programme;
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The implementation of the targeted development initiatives Towards the end of the financial year, the survey opened for identified during the talent plotting process, and which were submissions and the results will be published in the first quarter started during the 2017/2018 financial year, continued of the new financial year. It is envisaged that the initiatives for the talent pool that had been identified for critical and implemented thus far will most likely help the SACAA to move scarce positions. Furthermore, the mentorship programme further up the rankings. was implemented for the identified managers in the succession pool. The SACAA Executives who had been trained on Bursary Programme mentorship and coaching were paired with the identified Managers and they provided the necessary mentorship. This The SACAA continued to implement the bursary programme, was the first time that the organisation implemented such a which entails the financial assistance of students pursuing programme, which has since proven to be a success with the studies and training in the following fields: Pilot Training mentees. The mentorship programme will continue into the new Programme, Aeronautical Engineering, and Aircraft Maintenance financial year, as feedback from mentees indicates that they Engineering. A total of twenty-seven (27) bursary students benefited from it tremendously. participated in the programme during the 2018/2019 financial year. Twelve (12) of the students started their training during Employee Value Proposition Quarter 4 of the financial year.
The results of the annual Universum Most Attractive Employer This bursary programme is aimed at providing opportunities, Survey were published during the first quarter of the reporting especially for the previously disadvantaged youth, to enter the period. The SACAA was ranked among the Top 100 Most aviation industry and contribute towards the transformation Attractive Employers by both engineering and technology objectives of the SACAA. The SACAA further signed an professionals and students. Valuable insights were received agreement with École Nationale de Aviation Civile (ENAC), from the survey results, which were used to enhance the SACAA and in accordance with this agreement the SACAA sent five employee value proposition. The information was also used to (5) students Cadet Pilot students to France. The students create an employer brand repositioning plan that culminated in went through a stringent selection process, and the successful the implementation of several initiatives to support the strategy candidates left for ENAC in Toulouse in February 2019 to from both an internal and external perspective. commence with their two-year training programme.
“The SACAA ranks among the top 100 most attractive employers”
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Internship programme Employee relations
The internship programme was established to provide young The SACAA continues to ensure transparency in terms of graduates with an opportunity to gain work experience and engagements with its staff, in order to ensure sound employee to provide practical exposure for students who are studying relations. In addition, the SACAA subscribes to freedom of towards a qualification that requires experiential learning. The association in line with the provision of the Constitution of the SACAA hosted a total of thirty-two (32) interns, in various fields, Republic of South Africa, Act No 108 of 1996 and the Labour during the period April 2018 to March 2019. Relations Act, No 66 of 1995. To this end, the SACAA and NUMSA signed a Recognition Agreement in January 2016. Employee wellness In addition, the SACAA has initiated a process to review the current Recognition Agreement, and it is anticipated that the During the year under review, an Employee Assistance process will continue in the new financial year. Programme (EAP) was successfully implemented, and focused on the psychosocial, physical, and mental wellbeing of Human resource oversight statistics employees. Other services on offer included the management of chronic disease, disability management, financial wellness, as This section of the report provides statistics in relation to various well as the management of poor performance. Employees also Human Resources activities and functions. received wellness support on matters relating to psychosocial issues, such as marriage and family problems, work challenges, Personnel Costs by Division addiction problems, trauma, legal matters, as well as financial management matters. The personnel costs in the table below are inclusive of fixed and variable pay for permanent, fixed-term, and part-time contracted employees, as well as a stipend for bursars and interns. The Employee rewards and recognition amounts that follow relate to the payments made through payroll, and thus exclude temporary staff members employed through As one of its principles, the SACAA continued striving to reward the services of recruitment agencies, as well as accruals and its employees fairly, equitably, and consistently in accordance provisions as disclosed in the Annual Financial Statements. with the SACAA value system. The SACAA has created an environment that attracts, retains and motivates employees to perform in alignment with the SACAA’s goals. During the year under review, the SACAA embarked on the next phase of the salary normalisation project to improve salary equity and fairness in the organisation. The salary normalisation journey will proceed into the new financial year to ensure continuous improvement in remuneration practices. The SACAA recognised the outstanding performance of employees and rewarded deserving employees with annual incentives. This included the hosting of an Employee Awards event, which had been created to give recognition to those employees who have performed over and above the required standard.
Trainee programme
The SACAA implemented a trainee programme with the appointment of six (6) trainees in the organisation. The programme is designed to contribute to the transformation imperatives of the SACAA and to address the scarce skills challenge currently being experienced by the organisation and the industry. All the trainees are required to complete the training programme that has been specifically tailored to the area in which they have been appointed. The programme includes formal and on-the-job training.
Annual Report 2018 | 2019 87 PART A PART PART D - Human Resources General Information General
Personnel cost by Division
Division Personnel Personnel Number of Average personnel expenditure expenditure as a % employees cost per employee R of total R Accident and Incident Investigations 21 117 986 5% 25 844 719 Division Aviation Infrastructure 45 025 198 10% 51 882 847 Aviation Safety Operations 191 029 910 42% *223 856 636 Aviation Security 39 236 804 9% 48 817 433 Finance 42 959 127 9% *64 671 236 Human Resources 19 403 379 4% *41 473 253 Company Secretary 6 001 800 1% 5 1 200 360 Legal and Aviation Compliance 24 546 587 5% 24 1 022 774 Internal Audit 10 620 355 2% *10 1 062 036 Flight Inspection Unit 10 254 650 2% 9 1 139 406 Cape Town Regional Office 7 888 983 2% 9 876 554 Corporate Services 41 974 898 9% **48 874 477 Total 460 059 677 100% 557 825 960 * This number includes fixed-term contractors, interns and bursars. **This number includes the office of the DCA. Table 25: Personnel cost by Division
Personnel costs by Salary band/level The personnel costs reflected in the table below depict all positions according to the different occupational levels in the organisation. The occupational levels are aligned to the Paterson grading system.
Personnel cost by salary band/level
Band/level Personnel % of personnel Number of Average personnel expenditure expenditure to employees cost per employee R total R Top Management 6 477 415 1% 1 6 477 415 Senior Management 34 778 096 8% 10 3 477 810 Professional Qualified 120 743 475 26% 95 1 270 984 Skilled 275 554 655 60% 335 822 551 Semi-skilled 20 018 677 4% 51 392 523 Unskilled 2 487 359 1% 65 38 267 Total 460 059 677 100% 557 825 960
Table 26: Personnel cost by salary band/level
88 Annual Report 2018 | 2019 PART D - Human Resources PART A General Information
Performance rewards Performance rewards for the 2018/2019 financial year were implemented in August 2018, following approval from the SACAA’s Board of Directors.
Performance rewards by salary band/level
Band/level Performance reward Personnel expenditure % of performance R rewards to total Top Management 1 1 806 498 3% Senior Management 10 7 153 596 11% Professional Qualified 91 20 100 134 31% Skilled 306 34 477 074 52% Semi-skilled 47 2 150 714 3% Unskilled 2 58 329 0% Total 457 65 746 345 100%
Table 27: Performance rewards by salary band/level
Skills development cost A total of R24 287 853 was spent on skills development during the 2018/2019 financial year. Of the employees that were trained, 82% were black employees, and in terms of gender 45% were female, and 27% of them were below the age of 35.
27% Below the age of 35 82% Black employees
R24 287 854 spent on skills development 2018/2019 45% Females
Figure 04: Skills development cost
Annual Report 2018 | 2019 89 PART A PART PART D - Human Resources General Information General
Training costs per Division
Division Personnel Training Number of Average training expenditure expenditure* employees cost per employee R R trained R Accident and Incident Investigations 21 117 986 651 814 21 31 039 Division Aviation Infrastructure 45 025 198 1 240 703 40 31 018 Aviation Safety Operations 191 029 910 6 185 806 128 48 326 Aviation Security 39 236 804 1 536 433 44 34 918 Finance 42 959 127 956 609 42 22 776 Human Resources* 19 403 379 10 451 311 133 78 581 Company Secretary 6 001 800 183 938 4 45 984 Legal and Aviation Compliance 24 546 587 963 859 23 41 906 Internal Audit 10 620 355 263 887 11 23 989 Flight Inspection Unit 10 254 650 488 388 7 69 770 Cape Town Regional Office** 7 888 983 - 4 - Corporate Services 41 974 898 1 365 106 46 29 676 Subtotal 460 059 677 24 287 854 503 48 286
*This number includes training for interns and bursars. *The training expenditure for Human Resources includes expenditure for the Henley Programme and all bursary costs. **The training expenditure for staff members based in the Cape Town Regional Office is allocated in the respective divisions to which they report. Table 28: Training costs per Division
Employment and Vacancies The filling of vacant positions in the organisation was in line with the targets determined in the Employment Equity Plan. Most of the fixed-term contracts in the organisation are positions within the technical divisions which are being filled permanently, as the fixed- term contracts expire. Employing people with a disability is still a priority, as it forms part of the employment equity plan.
90 Annual Report 2018 | 2019 PART D - Human Resources PART A General Information
Employment and vacancies per Division
Division 2017/2018 2018/2019 2018/2019 2018/2019 % of vacancies Number of Approved Number of vacancies Employees Posts employees Accident and Incident 26 29 25 4 13.8 Investigations Division Aviation Infrastructure 47 55 51 4 7.3 Aviation Safety Operations 209 248 223 25 10.1 Aviation Security 41 51 48 3 5.9 Finance 55 56 64 *(8) (14.3) Human Resources 36* 17 41 **(24) (141.2) Company Secretary 4 5 5 0 0.0 Legal and Aviation Compliance 24 27 24 3 11.1 Flight Inspection Unit 8 8 9 *(1) (12.5) Internal Audit 11 9 10 * (1) (11.1) Cape Town Regional Office 9 2 9 * (7) (350.0) Office of the DCA 3 3 2 1 33.3 Corporate Services 45 43 46 * (3) (7.0) Total 518 553 557 **(4) (0.7)
* This number includes fixed-term contract employees and interns. ** The negative variance is due to the inclusion of interns and bursars. Table 29: Employment and vacancies per Division
Employment Changes The table below reflects changes that took place during the period under review.
Level Employment Appointments Terminations Employment at beginning of at end of the period period Top Management 1 0 0 1 Senior Management 10 0 0 10 Professional Qualified and Middle Management 96 7 8 95 Skilled 318 48 31 335 Semi-skilled 59 8 16 51 Unskilled 34 52 21 65 Total 518 115 76 557
The total number of appointments and terminations includes fixed-term contract employees, interns and bursars.
Table 30: Employment changes per salary band/level
Annual Report 2018 | 2019 91 PART A PART PART D - Human Resources General Information General
Reasons for Staff Exits The diagram below indicates the attrition rate as well as the reasons for staff exiting the organisation. Information gained from the exit interviews feeds into the organisational retention plan.
Resignation
Death 28
1 Retirement Dismissal 0 5
19
End of Internship and 22 Expiry of Contract Bursary Programmes
Total 75
* This number includes fixed-term contractors, interns, and bursars. Diagram 03: Reasons for staff exits
Labour Relations: Misconduct and Disciplinary Action The figure below provides information around cases of misconduct and actions taken.
Summary of misconduct and disciplinary action
Nature of Disciplinary Action
Final written Verbal Warning Written Warning Dismissal 2 2 Warning 1 0
Figure 04: Misconduct and disciplinary action
92 Annual Report 2018 | 2019 PART D - Human Resources PART A General Information
Equity Targets and Employment Equity Status The following tables will detail the current status around employment equity in the organisation.
Employment equity status – male
African Coloured Indian White Top Management Top Management Top Management Top Management Current Target Current Target Current Target Current Target 0 0 0 0 0 0 0 0
Senior Management Senior Management Senior Management Senior Management Current Target Current Target Current Target Current Target 4 4 0 0 1 1 1 1
Professional Qualified Professional Qualified Professional Qualified Professional Qualified Current Target Current Target Current Target Current Target 36 44 2 4 2 5 10 8
Skilled Skilled Skilled Skilled Current Target Current Target Current Target Current Target 135 141 7 25 23 18 32 32
Semi-skilled Semi-skilled Semi-skilled Semi-skilled Current Target Current Target Current Target Current Target 9 9 0 0 0 0 0 0
Unskilled Unskilled Unskilled Unskilled Current Target Current Target Current Target Current Target 0 0 0 0 0 0 0 0
Total Total Total Total Current Target Current Target Current Target Current Target 184 198 9 29 26 24 43 41
* The tables include fixed-term contract employees but excludes interns and bursars Table 31: Employment equity status - male
Annual Report 2018 | 2019 93 PART A PART PART D - Human Resources General Information General
Employment equity status – female
African Coloured Indian White Top Management Top Management Top Management Top Management Current Target Current Target Current Target Current Target 1 1 0 0 0 0 0 0
Senior Management Senior Management Senior Management Senior Management Current Target Current Target Current Target Current Target 3 3 0 0 1 1 0 0
Professional Qualified Professional Qualified Professional Qualified Professional Qualified Current Target Current Target Current Target Current Target 26 27 1 2 0 0 3 4
Skilled Skilled Skilled Skilled Current Target Current Target Current Target Current Target 113 118 9 20 10 10 21 21
Semi-skilled Semi-skilled Semi-skilled Semi-skilled Current Target Current Target Current Target Current Target 43 42 1 3 3 5 1 1
Unskilled Unskilled Unskilled Unskilled Current Target Current Target Current Target Current Target 2 3 0 0 0 0 0 0
Total Total Total Total Current Target Current Target Current Target Current Target 188 194 11 25 14 16 25 26
* The tables include fixed-term contract employees but excludes interns and bursars
Table 32: Employment equity status - female
94 Annual Report 2018 | 2019 PART D - Human Resources PART A General Information
Employment equity status – disabled staff
Top Management Top Management Current Target Current Target 0 0 0 0
Senior Management Senior Management Current Target Current Target 0 0 1 1
Professional Qualified Professional Qualified Current Target Current Target 0 0 0 0
Skilled Skilled Current Target Current Target 3 0 2 0
Semi-skilled Semi-skilled Current Target Current Target 1 0 2 3
Unskilled Unskilled Current Target Current Target 0 0 0 0
Total Total Current Target Current Target 4 0 5 4
* The tables exclude fixed-term contractors, interns and bursars.
Table 33: Employment equity status - disabled staff
Annual Report 2018 | 2019 95 PART A PART PART E - Financial Statements General Information General Consolidated Annual Financial Statements for the year ended 31 March 2019
PART Annual Financial Statements 96 Annual Report 2018 | 2019 PART E - Financial Statements PART A General Information Consolidated Annual Financial Statements for the year ended 31 March 2019 Index
The reports and statements set out below comprise the consolidated annual financial statements presented to the Parliament:
Index Page
Report of the Auditor-General 98 - 101
Accounting Authority’s Responsibilities and Approval 102 - 103
Audit and Risk Committee Report 104 - 107
Accounting Authority’s Report 108 - 111
Company Secretary’s Certification 112
Statement of Financial Position 113
Statement of Financial Performance 114
Statement of Changes in Net Assets 115
Cash Flow Statement 116
Consolidated Statement of Comparison of Budget and Actual Amounts 117 - 118
Notes to the Consolidated Annual Financial Statements 119 - 164
Annual Report 2018 | 2019 97 PART A PART PART E - Financial Statements General Information General Consolidated Annual Financial Statements for the year ended 31 March 2019 Report of the Auditor-General to Parliament on South African Civil Aviation Authority
Opinion 1. I have audited the consolidated and separate financial statements of the South African Civil Aviation Authority set outon pages 113 to 164, which comprise the consolidated and separate statement of the financial position as at 31 March 2019, the consolidated and separate statement of financial performance, statement of changes in net assets, cash flow statement and statement of comparison of budget and actual amounts for the year then ended, as well as the notes to the consolidated and separate financial statements, including a summary of significant accounting policies. 2. In my opinion, the consolidated and separate financial statements present fairly, in all material respects, the financial position of the South African Civil Aviation Authority as at 31 March 2019, and its financial performance and cash flows for the year then ended in accordance with the Generally Recognised Accounting Practice (GRAP) and the requirements of the Public Finance Management Act (PFMA) of South Africa, 1999 (Act no. 1 of 1999).
Basis for opinion 3. I conducted my audit in accordance with the International Standards on Auditing (ISAs). My responsibilities under those standards are further described in the auditor-general’s responsibilities for the audit of the consolidated and separate financial statements section of this auditor’s report. 4. I am independent of the group in accordance with sections 290 and 291 of the International Ethics Standards Board for Accountants’ Code of ethics for professional accountants (IESBA code), parts 1 and 3 of the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) and the ethical requirements that are relevant to my audit in South Africa. I have fulfilled my other ethical responsibilities in accordance with these requirements and the IESBA codes. 5. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.
Responsibilities of the Accounting Authority for the consolidated and separate financial statements
6. The Board of Directors, which constitutes the accounting authority, is responsible for the preparation and fair presentation of the consolidated and separate financial statements in accordance with GRAP and the requirements of the PFMA, and for such internal control as the accounting authority determines is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error. 7. In preparing the consolidated and separate financial statements, the accounting authority is responsible for assessing the South African Civil Aviation Authority’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting, unless the appropriate governance structure either intends to liquidate the public entity or to cease operations, or has no realistic alternative but to do so.
Auditor-General’s responsibilities for the audit of the consolidated and separate financial statements 8. My objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated and separate financial statements. 9. A further description of my responsibilities for the audit of the consolidated and separate financial statements is included in the annexure to this auditor’s report.
Report on the audit of the annual performance report
98 Annual Report 2018 | 2019 PART E - Financial Statements PART A General Information Consolidated Annual Financial Statements for the year ended 31 March 2019
Introduction and scope 10. In accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA) and the general notice issued in terms thereof, I have a responsibility to report material findings on the reported performance information against predetermined objectives for selected objectives presented in the annual performance report. I performed procedures to identify findings but not to gather evidence to express assurance. 11. My procedures address the reported performance information, which must be based on the approved performance planning documents of the public entity. I have not evaluated the completeness and appropriateness of the performance indicators/ measures included in the planning documents. My procedures also did not extend to any disclosures or assertions relating to planned performance strategies and information in respect of future periods that may be included as part of the reported performance information. Accordingly, my findings do not extend to these matters. 12. I evaluated the usefulness and reliability of the reported performance information in accordance with the criteria developed from the performance management and reporting framework, as defined in the general notice, for the following selected objectives presented in the annual performance report of the public entity for the year ended 31 March 2019:
Pages in the annual performance Programmes/ objectives/ development priorities report Objective/Goal 1 – Regulate the aviation industry effectively and efficiently. 25
13. I performed procedures to determine whether the reported performance information was properly presented and whether performance was consistent with the approved performance planning documents. I performed further procedures to determine whether the indicators and related targets were measurable and relevant, and assessed the reliability of the reported performance information to determine whether it was valid, accurate and complete. 14. I did not raise any material findings on the usefulness and reliability of the reported performance information for this objective: • Goal 1 – regulate aviation industry efficiently and effectively
Other matters 15. I draw attention to the matters below.
Achievement of planned targets 16. Refer to the annual performance report on pages 26 to 35 for information on the achievement of planned targets for the year and explanations provided for the over achievement of some targets.
Adjustment of material misstatements 17. I identified material misstatements in the annual performance report submitted for auditing. These material misstatements were on the reported performance information of Goal 1: regulate the aviation industry effectively and efficiently. As management subsequently corrected the misstatements, I did not raise any material findings on the usefulness and reliability of the reported performance information.
Report on the audit of compliance with legislation Introduction and scope 18. In accordance with the PAA and the general notice issued in terms thereof, I have a responsibility to report material findings on the compliance of the public entity with specific matters in key legislation. I performed procedures to identify findings but not to gather evidence to express assurance. 19. The material findings on compliance with specific matters in key legislations are as follows:
Procurement and contract management 20. The total expenditure incurred on two contracts exceeded the original awarded contract price by an amount exceeding 15% of the contract value without pre-approval from National Treasury, resulting in non-compliance with the National Treasury SCM Instruction note 3 of 2016/2017 and Treasury Regulations. Other information
Annual Report 2018 | 2019 99 PART A PART PART E - Financial Statements General Information General Consolidated Annual Financial Statements for the year ended 31 March 2019
21. The accounting authority is responsible for the other information. The other information comprises the information included in the annual report which includes the General Information (DCA report), the audit committee’s report and human resource management information. The other information does not include the financial statements, the auditor’s report thereon and those selected objectives presented in the annual performance report that have been specifically reported in this auditor’s report. 22. My opinion on the financial statements and findings on the reported performance information and compliance with legislation do not cover the other information and I do not express an audit opinion or any form of assurance conclusion thereon. In connection with my audit, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements and the selected objectives presented in the annual performance report, or my knowledge obtained in the audit, or otherwise appears to be materially misstated. 23. In connection with my audit, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements and the selected objectives presented in the annual performance report, or my knowledge obtained in the audit, or otherwise appears to be materially misstated. 24. If, based on the work I have performed on the other information obtained prior to the date of this auditor’s report, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard.
Internal control deficiencies 25. I considered internal control relevant to my audit of the financial statements, reported performance information and compliance with applicable legislation; however, my objective was not to express any form of assurance on it. The matters reported below are limited to the significant internal control deficiencies that resulted in the finding on compliance with legislation included in this report.
Financial and performance management Compliance monitoring There was a misinterpretation of requirements of the Treasury Instruction notes and Treasury Regulations which resulted in non- compliance with the PFMA.
Other reports 26. I draw attention to the following engagements conducted by various parties that had, or could have, an impact on the matters reported in the public entity’s financial statements, reported performance information, compliance with applicable legislation and other related matters. These reports did not form part of my opinion on the financial statements or my findings on the reported performance information or compliance with legislation. 27. There are investigations being conducted on the suspended senior manager in the supply chain management division and the manager in the information technology division. At the date of this report, the investigations were still ongoing. 28. Investigations are being conducted on the alleged cyber attacks on the entity’s information communication technology systems that were identified on 01 July 2019. At the date of this report, the investigations were still ongoing.
______Pretoria 31 July 2019
100 Annual Report 2018 | 2019 PART E - Financial Statements PART A General Information Consolidated Annual Financial Statements for the year ended 31 March 2019 Annexure – Auditor-General’s responsibility for the audit
1. As part of an audit in accordance with the ISAs, I exercise professional judgement and maintain professional scepticism throughout my audit of the consolidated and separate financial statements, and the procedures performed on reported performance information for selected objectives and on the public entity’s compliance with respect to the selected subject matters.
Financial statements 2. In addition to my responsibility for the audit of the consolidated and separate financial statements as described in this auditor’s report, I also • identify and assess the risks of material misstatement of the consolidated and separate financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; • obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the public entity’s internal control; • evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors, which constitutes the accounting authority; • conclude on the appropriateness of the Board of Directors, which constitutes the accounting authority’s use of the going concern basis of accounting in the preparation of the consolidated and separate financial statements. I also conclude, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the South African Civil Aviation Authority’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements about the material uncertainty or, if such disclosures are inadequate, to modify the opinion on the financial statements. My conclusions are based on the information available to me at the date of this auditor’s report. However, future events or conditions may cause a public entity to cease continuing as a going concern; and • evaluate the overall presentation, structure and content of the consolidated and separate financial statements, including the disclosures, and whether the consolidated and separate financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Communication with those charged with governance 3. I communicate with the accounting authority regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit. 4. I also confirm to the accounting authority that I have complied with relevant ethical requirements regarding independence, and communicate all relationships and other matters that may reasonably be thought to have a bearing on my independence and, where applicable, related safeguards.
Annual Report 2018 | 2019 101 PART A PART PART E - Financial Statements General Information General Consolidated Annual Financial Statements for the year ended 31 March 2019 Accounting Authority’s Responsibilities and Approval
The Board is required by the Public Finance Management Act (Act No.1 of 1999), to maintain adequate accounting records and is responsible for the content and integrity of the consolidated annual financial statements and related financial information included in this report. It is the responsibility of the Board to ensure that the consolidated annual financial statements fairly present the state of affairs of the group as at the end of the financial year and the results of its operations and cash flows for the period then ended. The external auditors are engaged to express an independent opinion on the consolidated annual financial statements and were given unrestricted access to all financial records and related data.
The consolidated annual financial statements have been prepared in accordance with the Standards of Generally Recognised Accounting Practice (GRAP) including any interpretations, guidelines and directives issued by the Accounting Standards Board.
The consolidated annual financial statements are based upon appropriate accounting policies, consistently applied and supported by reasonable and prudent judgments and estimates.
The Board acknowledges that it is ultimately responsible for the system of internal financial control established by the group and places considerable importance on maintaining a strong control environment. To enable the Board to meet these responsibilities, the Board sets standards for internal control aimed at reducing the risk of error or fraud in a cost-effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the group and all employees are required to maintain the highest ethical standards in ensuring that the group’s business is conducted in a manner that under all reasonable circumstances is above reproach. The focus of risk management in the group is on identifying, assessing, managing and monitoring all known forms of risk across the group. While the operating risk cannot be fully eliminated, the group endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints.
The Board is of the opinion, based on the information and explanations given by management, that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the consolidated annual financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or fraud.
The Board has reviewed the group’s cash flow forecast for the year to 31 March 2020 and, in the light of this review and the current financial position, they are satisfied that the group has access to adequate resources to continue in operational existence for the foreseeable future.
Although the Board is primarily responsible for the financial affairs of the group, they are supported by the group’s external auditors. The external auditors are responsible for independently reviewing and reporting on the group’s consolidated annual financial statements. The consolidated annual financial statements have been examined by the group’s external auditors and their report is presented on page 98 to 100.
102 Annual Report 2018 | 2019 PART E - Financial Statements PART A General Information Consolidated Annual Financial Statements for the year ended 31 March 2019
The consolidated annual financial statements set out on pages 113 to 164, which have been prepared on a going concern-basis, were approved by the Board on 31 July 2019 and were signed on its behalf by:
______Mr E Khosa Mr S Sooklal Chairperson: SACAA Board Chairperson: Audit and Risk Committee
______Ms GNB Khoza Director of Civil Aviation
Annual Report 2018 | 2019 103 PART A PART PART E - Financial Statements General Information General Consolidated Annual Financial Statements for the year ended 31 March 2019 Audit and Risk Committee Report
We are pleased to present our report for the financial year ended 31 March 2019.
Audit and Risk Committee responsibility
The Audit and Risk Committee reports that it has complied with its responsibilities arising from section 50(1) and 51(1) of the PFMA and Treasury Regulations. The Audit and Risk Committee also reports that it has adopted appropriate formal terms of reference as its Audit and Risk Committee Charter, and has regulated its affairs in compliance with this charter and has discharged all its responsibilities as contained therein.
The Audit and Risk Committee for 2018/19 comprised three non-executive members and was chaired by an independent non- executive member, Mr Surendra Sooklal from 1 April 2018 to 30 September 2018 and from 01 February 2019 to 31 March 2019. The Director of Civil Aviation, Chief Financial Officer, Chief Audit Executive, Executive: Corporate Services and the Auditor-General of South Africa all have a standing invitation to the Audit and Risk Committee meetings. The appointment of the Audit and Risk Committee members is confirmed annually at the Annual General Meeting by the Executive Authority.
Effective from 1 April 2018, the Minister of Transport appointed an interim Board for a period of six months and on 16 April 2018, the Interim Board appointed the following members to the Audit and Risk Committee:
Mr S Sooklal (Chairperson of Audit and Risk Committee) Prof NV Dyani-Mhango Mr E Khosa
The term of the interim Audit and Risk Committee ended on 30 September 2018.
The Minister of Transport appointed a new Board, effective from 1 December 2018, and the following members were appointed to the Audit and Risk Committee by the Board on 1 February 2019:
Mr S Sooklal (Chairperson of Audit and Risk Committee) Mr M India Dr B Suckling
On an annual basis, the Audit and Risk Committee assesses the effectiveness of the Internal Audit activity against the criteria outlined below: • Achievement of the annual Internal Audit Plan; • Compliance with the Institute of Internal Auditors’ professional standards; • Achievement of reporting protocols through management to the audit and risk committee; • Timeliness of reporting of findings and activities; • Responsiveness to the changing business and operational environment; • Management’s acceptance of the internal audit findings; • Quality and relevance of the annual assessment reports; • Level of co-operation and interaction with other assurance providers within the agreed combined assurance approach; • Maintenance of adequate staffing and resource levels to achieve the annual Internal Audit Plan outcomes and meetthe requirements of the Internal Audit Charter; and • Meeting the budget allocated to the internal audit function.
104 Annual Report 2018 | 2019 PART E - Financial Statements PART A General Information Consolidated Annual Financial Statements for the year ended 31 March 2019
During the period under review, the Committee held four scheduled meetings. The chairperson of the Committee reports to the Board quarterly, with regard to the Committee’s deliberations, decisions and recommendations.
Attendance of Audit and Risk Committee meetings (01 April 2018 to 30 September 2018) Mr S Sooklal 3 out of 3 Prof NY Dyani-Mhango 3 out of 3 Mr E Khosa 1 out of 3
Attendance of Audit and Risk Committee meetings (01 February 2019 to 31 March 2019) Mr S Sooklal 1 out of 1 Mr M India 1 out of 1 Dr B Suckling 1 out of 1
Work of the Committee in 2018/2019
At our meetings held during the financial year, the Committee focused on financial reporting, internal controls, internal audit, external audit, ICT governance, risk, ethics, compliance and combined assurance. The committee constantly received presentations from management which covered key accounting judgements and estimates, internal control and risk management. We also reviewed the committee’s own Terms of Reference, which were duly approved by the Board in April 2018.
The effectiveness of internal control
Internal Audit provides the Audit and Risk Committee with reasonable assurance that the internal controls are adequate and effective. This is achieved by means of the risk management process, as well as the identification of corrective actions and suggested enhancements to the controls and processes. From the various reports of the internal and external auditors, we noted that matters which indicated any deficiencies in the system of internal control have been brought under management’s attention and corrective measures have been implemented. Accordingly, we can report that the systems of internal control over financial reporting for the period under review was adequate and effective.
Section 51(1)(a)(i) of the PFMA states that the Accounting Authority must ensure that the SACAA maintains an effective, efficient and transparent system of financial management, risk management and internal control.
Evaluation of consolidated annual financial statements
The Audit and Risk Committee reviewed the consolidated annual financial statements of the SACAA and is satisfied that they comply with the accounting standards and that the accounting policies used, are appropriate. The consolidated annual financial statements were reviewed with the following focus: • Significant financial reporting judgments and estimates contained in the consolidated annual financial statements; • Clarity and completeness of disclosure and whether disclosures made have been set properly in context; • Quality and acceptability of, and any changes in accounting policies and practices; • Compliance with accounting standards and legal requirements; • Significant adjustments and/or unadjusted differences resulting from the audit;
Annual Report 2018 | 2019 105 PART A PART PART E - Financial Statements General Information General Consolidated Annual Financial Statements for the year ended 31 March 2019
• Reflection of unusual circumstances or events and management’s explanation for the accounting treatment adopted; • Reasons for major year-on-year fluctuations; • Asset valuations and revaluations; • Calculation and levels of general and specific provisions; • Write-offs and reserve transfers; and • The basis for the going concern assumption.
Financial reporting
In addressing our key objective, which is to assist the SACAA through the Board, in ensuring the integrity of its financial statements, we reviewed the financial statements with both management and the external auditor, concentrating on: • Compliance with financial reporting standards and governance reporting requirements; • Areas requiring significant judgments to be made in applying accounting policies; • The appropriateness of accounting policies; • The procedures and controls around estimates that are key to applying accounting policies; and • Whether the annual report and accounts, taken as a whole, is fair, balanced and understandable and provides information necessary for stakeholders to assess the SACAA’s business model, strategy and performance.
The Committee focused on ensuring the integrity of the SACAA’s financial reporting and improving the financial controls framework and assessed the fair presentation of the financial statements.
Internal Audit
The Audit and Risk Committee is responsible for ensuring that the internal audit function is independent and has the necessary resources, standing and authority within the SACAA to enable it to discharge its duties. Furthermore, the Committee oversees co- operation between the internal and external auditors, and serves as a link between the Board of Directors and these functions and its audits.
The Audit and Risk Committee reviews and approves the three-year Internal Audit Plan annually. Internal Audit’s activities are measured against the approved internal audit plan and the Chief Audit Executive tables progress reports in this regard to the Committee on a quarterly basis.
The Audit and Risk Committee considered and recommended the internal audit charter for approval by the Board.
Furthermore, the Audit and Risk Committee monitored the implementation of the Combined Assurance Plan and Model to ensure the coordination and alignment of assurance activities across the various lines of defence, so that assurance has the appropriate depth and reach.
Whistle-blowing
In compliance with the Protected Disclosures Act, 2000, the SACAA has established and maintains an independent fraud hotline service. The Audit and Risk Committee wishes to report that, for the financial year under review, it received and dealt with all concerns or complaints, whether from within or outside of the SACAA, relating to the accounting practices, content or auditing of SACAA’s financial statements, the internal financial controls and other matters.
The Audit and Risk Committee has reviewed reports from the Chief Audit Executive on fraud and corruption and is satisfied with the progress and the implementation of the Fraud Framework. In March 2019, the Audit and Risk Committee reviewed the Whistleblowing Policy to ensure alignment to the legislative changes.
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The quality of management and quarterly reports submitted in terms of the PFMA
The Committee further reports that, during the year under review, they were presented with regular quarterly management reports to enable them to: • Monitor the integrity, accuracy and reliability of the financial position of the SACAA; • Review the management accounts of the SACAA to provide the Accounting Authority with an authoritative and credible view of the SACAA’s financial position; • Review the disclosures made in the financial reports of the SACAA and the context in which statements on the financial health of the SACAA are made; • Review all material information presented together with the management account; and • Compliance to the PFMA.
The quality of budgets submitted in terms of the PFMA
The Committee is satisfied that it received sufficient, reliable and timely information that enabled it to: • Review and ensure that the annual budgets are balanced, credible and realistic against the approved business plans; and • Monitor and periodically review the implementation of the approved budget by the Board.
Auditor-General of South Africa
The Audit and Risk Committee met with the Auditor-General of South Africa to ensure that there are no unresolved issues.
The Audit and Risk Committee monitored the implementation of the action plan to address matters arising from the management report issued by the Auditor-General of South Africa for the 2017/2018 financial year. All the action items were closed by the end of the 2018/2019 financial year.
The Audit and Risk Committee concurs with, and accepts the conclusions and the audit opinion of the Auditor-General of South Africa on the consolidated annual financial statements and is of the view that the audited financial statements be accepted and read together with the report of the Auditor-General of South Africa.
______Mr S Sooklal Chairperson of the Audit and Risk Committee Date: 31 July 2019
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The Board hereby submits its report for the year ended 31 March 2019.
1. Introduction
The Board presents its twenty-first Annual Report in terms of the Civil Aviation Act, 2009 (Act No. 13 of 2009), (previously governed by the South African Civil Aviation Authority (Act No. 40 of 1998)) and the Public Finance Management Act, 1999 (Act No. 1 of 1999) which forms part of the consolidated, audited annual financial statements for the year ended 31 March 2019.
2. Principal activities
Main business and operations
The South African Civil Aviation Authority (SACAA) is a statutory body which has the primary focus to control and regulate civil aviation in the Republic of South Africa and to oversee the functioning and development of the civil aviation industry.
The Civil Aviation Act, 2009, read in conjunction with the South African Civil Aviation Authority Levies Act, 1998 (Act No. 41 of 1998), enables the SACAA to charge a passenger safety charge on scheduled operations, a fuel levy on non-scheduled operations and general aviation, and charges for services rendered to the aviation industry, allowing it to generate revenue to fund its operations.
During the year, there were no major changes in the activities of the business.
The consolidated operating results and state of affairs of the group are fully set out in the financial statements and do not, in the opinion of the Board, require any further comment.
The Group and SACAA recorded a surplus of R1 352 326 and R2 070 280 respectively for the year ended 31 March 2019 (2018: R44 504 617 and R44 629 438).
3. Going concern
The consolidated annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.
4. Events after the reporting date
The South African Civil Aviation Authority (SACAA) has taken over all the functions and operations, assets, liabilities and contingent liabilities of RAASA with effect from 01 April 2019.
The Board is not aware of any significant events that occurred after the reporting date that were not adjusted or disclosed in the consolidated annual financial statements. Furthermore, management is not aware of any circumstances that exist that would impede the group’s ability to continue as a going concern.
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5. Accounting policies
The consolidated annual financial statements are prepared in accordance with the South African Statements of Generally Recognised Accounting Practice (GRAP), including any interpretations of such Statements issued by the Accounting Standards Board as the prescribed framework by National Treasury.
6. Accounting Authority
The members of the SACAA Board during the year and to the date of this report are as follows:
Name Interim Board Appointment of New Board Mr E Khosa Appointed 1 April 2018 to 30 September 2018 Reappointed 1 December 2018 Mr MG India Appointed 1 April 2018 to 30 September 2018 Reappointed 1 December 2018 Prof NV Dyani-Mhango Appointed 1 April 2018 to 30 September 2018 Reappointed 1 December 2018 Mr S Sooklal Appointed 1 April 2018 to 30 September 2018 Reappointed 1 December 2018 Dr BC Suckling Appointed 1 April 2018 to 30 September 2018 Reappointed 1 December 2018 Ms T Phewa Appointed 1 April 2018 to 30 September 2018 Reappointed 1 December 2018 Mr SS Mokoena Appointed 1 April 2018 to 30 September 2018 Term ended 30 September 2018 Ms GNB Khoza* Appointed 1 December 2013 Reappointed 1 December 2018 Mrs GB Koyana Not applicable Appointed 1 December 2018
The Authority did not have a Board for the period 1 October 2018 to 30 November 2018.
* The Director of Civil Aviation’s initial five-year contract came to an end on 30 November 2018 and was renewed for a further five-year term, effective from 1 December 2018.
7. Company Secretary
The secretary of the SACAA is Ms N Naraindath, whose business and postal address are as follows:
Business address Ikhaya Lokundiza Building 16, Treur Close Waterfall Park, Bekker Street Midrand 1685
Postal address Private Bag X73 Halfway House 1685
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8. Interests of Board Members
The Board members have, at each Board meeting, confirmed that they had no material personal interests in any transactions of any significance with the SACAA. Board members are required to sign a declaration of interest at every meeting attended. In addition, they are required to declare any conflict of interests annually and as and when there are changes. Accordingly, no conflict of interest with regard to directors’ interests in contracts was reported. There was no change in directors’ interests in the period between the financial year-end and the date of signature of this report.
9. Corporate governance
General The Board is committed to business integrity, transparency and professionalism in all its activities. As part of this commitment, the Board subscribes to the highest standards of corporate governance and the ongoing development of best practice.
The Board confirms and acknowledges its responsibility to apply the principles set out in the King IV Report on Corporate Governance for South Africa 2016. The Board discusses the responsibilities of management in this respect at Board meetings and monitors the SACAA’s compliance with the relevant legislative prescripts.
The salient features of the SACAA’s adoption of King IV are outlined below:
Board of Directors The Board:
• retains full control over the SACAA, its plans and strategy; • acknowledges its responsibilities as to strategy, compliance with internal policies, laws and regulations, effective risk management and performance measurement, transparency and effective communication with all stakeholders, both internally and externally by the SACAA; • is of a unitary structure comprising: • six non-executive directors, all of whom are independent directors as defined in King IV; • one non-executive director who is an employee of the Department of Transport; and • one executive director.
Chairperson and Director of Civil Aviation The Chairperson of the Board is a non-executive and independent director (as defined by King IV).
The roles of the Chairperson and the Director of Civil Aviation are distinct, with responsibilities divided between them, so that no individual has unfettered powers of discretion.
Remuneration The Director of Civil Aviation is appointed by the Minister of Transport, who is the Executive Authority of the SACAA. In terms of the Civil Aviation Act, 2009, the Executive Authority determines the remuneration of the Director of Civil Aviation. The Board determines the Remuneration Policy and Strategy of the SACAA.
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Board meetings In terms of the Board Charter, the Board meets at least five times per annum, and during the year under review the Board met on nine occasions. It has also successfully held the Board induction programmes, strategic planning and risk sessions.
Non-executive directors have access to all the members of management of the SACAA.
10. Controlled entities
The SACAA is the ultimate parent of the group. The SACAA has a controlling interest in Recreation Aviation Administration South Africa NPC (RAASA) through a contractual agreement.
The SACAA’s control relates to its power to govern the financial resources and operating policies of RAASA so as to obtain benefits from its activities. The SACAA also appoints four of the eight directors of RAASA including the chairperson, whilst receiving non- financial benefits as described below.
The RAASA is incorporated in South Africa in terms of the Companies Act, 2008 (Act No.71 of 2008). The purpose of RAASA is to ensure compliance with the South African Civil Aviation regulations affecting sport and recreational aviation and to liaise with non- profit bodies that represent sport aviation.
The SACAA has taken over all the functions and operations, assets, liabilities and contingent liabilities of RAASA with effect from 01 April 2019.
11. Auditors
In terms of the Public Audit Act, 2004 (Act No. 25 of 2004) as amended, specifically section 4 (3) provides that the Auditor-General may audit and report on the accounts and financial statements.
The Executive Authority confirmed the appointment of the Auditor-General as the external auditors of the SACAA at the Annual General Meeting held on 30 August 2018.
12. Number of Employees
The number of employees for the SACAA and group as at 31 March 2019 is 557 (2018: 518) and 575 (2018: 537) respectively, which includes permanent, fixed-term, part-time and contracted employees.
13. Materiality Framework
In terms of Treasury Regulation 28 (3) of the PFMA, the Board must develop and agree on a framework of acceptable levels of materiality and significance with the relevant Executive Authority.
The SACAA has developed a materiality framework whereby all material and significant information is disclosed to the Audit and Risk Committee, the Board and the Executive Authority on a quarterly basis.
Annual Report 2018 | 2019 111 PART A PART PART E - Financial Statements General Information General Consolidated Annual Financial Statements for the year ended 31 March 2019 Company Secretary’s Certification
In my capacity as Company Secretary, I hereby confirm that the SACAA has lodged all returns as required by the Public Finance Management Act, 1999 as amended, for the year ended 31 March 2019.
______Ms N Naraindath Company Secretary Midrand
112 Annual Report 2018 | 2019 PART E - Financial Statements PART A General Information Consolidated Annual Financial Statements for the year ended 31 March 2019 Statement of Financial Position
As at 31 March 2019 Description Notes Group SACAA 2019 2018 2019 2018 Restated* Restated* R R R R
Assets Current Assets Cash and cash equivalents 3 300 107 608 306 339 587 299 699 631 305 564 494 Trade and other receivables from non- 4 74 458 330 60 378 356 74 422 045 60 339 120 exchange transactions Trade and other receivables from 5 970 425 - 970 425 - exchange transactions Consumable stores 6 1 078 845 - 1 078 845 - 376 615 208 366 717 943 376 170 946 365 903 614
Non-Current Assets Property, plant and equipment 7 41 952 117 37 188 867 41 760 878 36 901 405 Intangible assets 8 74 119 194 72 568 619 74 119 194 72 568 134 116 071 311 109 757 486 115 880 072 109 469 539 Total Assets 492 686 519 476 475 429 492 051 018 475 373 153
Liabilities Current Liabilities Trade and other payables 10 76 430 368 76 813 518 75 814 257 76 448 586 Operating lease liability 11 1 685 309 966 979 1 685 309 966 979 Provisions 12 80 269 113 65 745 529 80 269 113 65 745 529 Total Liabilities 158 384 790 143 526 026 157 768 679 143 161 094 Net Assets 334 301 729 332 949 403 334 282 339 332 212 059
Total Net Assets 334 301 729 332 949 403 334 282 339 332 212 059
* See Note 31
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For the year ending 31 March 2019 Description Notes Group SACAA 2019 2018 2019 2018 Restated* Restated* R R R R
Revenue Revenue from non-exchange transactions 14 681 447 669 628 737 320 679 595 417 627 020 626 Interest revenue from exchange 15 18 536 172 17 650 966 18 502 395 17 600 959 transactions Other revenue from exchange transactions 16 4 935 177 3 157 782 4 811 230 3 002 638 Total revenue 704 919 018 649 546 068 702 909 042 647 624 223
Expenditure Personnel cost 17 (477 222 605) (421 084 505) (470 668 047) (415 354 196) Operating expenses 18 (174 587 675) (137 943 166) (179 104 012) (142 317 750) Lease rentals on operating lease (31 041 656) (27 721 422) (30 532 089) (27 241 031) Depreciation and amortisation (8 973 056) (10 141 193) (8 877 611) (10 027 466) Finance costs 19 (272) (5 647) - (5 448) Repairs and maintenance 7 (10 364 708) (8 262 298) (10 281 546) (8 176 083) Bad debts written off 20 (1 016 912) (2 640 396) (1 016 912) (2 640 396) (Increase)/decrease in debt impairment 20 (246 370) 3 366 404 (246 370) 3 366 404 provision Total expenditure (703 453 254) (604 432 223) (700 726 587) (602 395 966) Operating surplus 1 465 764 45 113 845 2 182 455 45 228 257 Loss on disposal of assets (113 438) (609 228) (112 175) (598 819) Surplus for the year 1 352 326 44 504 617 2 070 280 44 629 438
* See Note 31
114 Annual Report 2018 | 2019 PART E - Financial Statements PART A General Information Consolidated Annual Financial Statements for the year ended 31 March 2019 Statement of Changes in Net Assets
For the year ending 31 March 2019 Description Accumulated Total Net Surplus Assets R R
GROUP Opening balance as previously reported 289 814 344 289 814 344 Correction of prior period error (refer to note 31) (1 369 558) (1 369 558) Balance at 01 April 2017 as restated 288 444 786 288 444 786 Changes in net assets Surplus for the year as previously stated 46 330 694 46 330 694 Correction of prior period error (refer to note 31) (1 826 077) (1 826 077) Total changes 44 504 617 44 504 617 Balance at 01 April 2018 as restated 332 949 403 332 949 403 Changes in net assets Surplus for the year 1 352 326 1 352 326 Total changes 1 352 326 1 352 326 Balance at 31 March 2019 334 301 729 334 301 729
SACAA Opening balance as previously reported 288 952 179 288 952 179 Correction of prior period error (refer to note 31) (1 369 558) (1 369 558) Balance at 01 April 2017 as restated 287 582 621 287 582 621 Changes in net assets Surplus for the year as previously stated 46 455 515 46 455 515 Correction of prior period error (refer to note 31) (1 826 077) (1 826 077) Total changes 44 629 438 44 629 438 Balance at 1 April 2018 as restated 332 212 059 332 212 059 Changes in net assets Surplus for the year 2 070 280 2 070 280 Total changes 2 070 280 2 070 280 Balance at 31 March 2019 334 282 339 334 282 339
Annual Report 2018 | 2019 115 PART A PART PART E - Financial Statements General Information General Consolidated Annual Financial Statements for the year ended 31 March 2019 Cash Flow Statement For the year ending 31 March 2019 Description Notes Group SACAA 2019 2018 2019 2018 R R R R Cash flows from operating activities Receipts Receipts from customers and Department 670 069 165 633 271 892 668 090 015 631 375 581 of Transport Interest revenue 15 18 536 172 17 650 966 18 502 395 17 600 959 688 605 337 650 922 858 686 592 410 648 976 540 Payments Payments made to suppliers and (679 436 727) (570 661 917) (677 056 956) (568 715 605) employees Finance costs 19 (272) (5 647) - (5 448) (679 436 999) (570 667 564) (677 056 956) (568 721 053) Net cash inflows from operating 23 9 168 338 80 255 294 9 535 454 80 255 487 activities
Cash flows from investing activities Purchase of property, plant and equipment 7 (11 113 945) (6 226 352) (11 113 945) (6 216 387) Proceeds from sale of property, plant and 279 135 74 979 279 135 74 979 equipment Purchase of intangible assets 8 (4 565 507) (16 228 614) (4 565 507) (16 228 614) Net cash flows from investing activities (15 400 317) (22 379 987) (15 400 317) (22 370 022)
Net (decrease)/increase in cash and (6 231 979) 57 875 307 (5 864 863) 57 885 465 cash equivalents Cash and cash equivalents at the beginning 306 339 587 248 464 280 305 564 494 247 679 029 of the year Cash and cash equivalents at the end 3 300 107 608 306 339 587 299 699 631 305 564 494 of the year
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For the year ending 31 March 2019 Budget on Approved Adjustments Final Actual Difference Note Accrual Basis budget Budget amounts on between reference comparable final budget basis and actual R R R R R
GROUP Statement of Financial Performance Revenue Revenue from exchange transactions Interest received 13 432 333 483 133 13 915 466 18 536 172 4 620 706 35 Other income 3 933 022 2 015 572 5 948 594 4 935 177 (1 013 417) 35 Total revenue from 17 365 355 2 498 705 19 864 060 23 471 349 3 607 289 exchange transactions
Revenue from non-exchange transactions Transfer revenue Passenger safety 539 419 246 (242 128) 539 177 118 532 263 061 (6 914 057) 35 charge User fees 104 707 164 (2 026 485) 102 680 679 101 678 621 (1 002 058) Fuel levy 30 315 837 (2 203 291) 28 112 546 25 583 055 (2 529 491) 35 Accident and incident 21 922 932 - 21 922 932 21 922 932 - investigation Total revenue from 696 365 179 (4 471 904) 691 893 275 681 447 669 (10 445 606) non-exchange transactions Total revenue 713 730 534 (1 973 199) 711 757 335 704 919 018 (6 838 317)
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For the year ending 31 March 2019
Budget on Approved Adjustments Final Actual Difference Note Accrual Basis budget Budget amounts on between reference comparable final budget basis and actual R R R R R
Expenditure Personnel cost (499 328 296) 13 708 117 (485 620 179) (477 222 605) 8 397 574 35 Operating expenses (165 004 269) (5 214 357) (170 218 626) (174 587 675) (4 369 049) 35 Lease rentals on (30 233 333) (12 076) (30 245 409) (31 041 656) (796 247) operating lease Depreciation and (21 142 001) 7 842 736 (13 299 265) (8 973 056) 4 326 209 35 amortisation Finance costs (5 300 441) 2 645 195 (2 655 246) (272) 2 654 974 35 Repairs and (8 495 498) (27 813) (8 523 311) (10 364 708) (1 841 397) 35 maintenance Bad debts written off - - - (1 016 912) (1 016 912) 35 Increase in debt - - - (246 370) (246 370) 35 impairment provision Total expenditure (729 503 838) 18 941 802 (710 562 036) (703 453 254) 7 108 782 Operating (deficit)/ (15 773 304) 16 968 603 1 195 299 1 465 764 270 465 surplus Loss on disposal of - - - (113 438) (113 438) 35 assets (Deficit)/surplus for (15 773 304) 16 968 603 1 195 299 1 352 326 157 027 the year Actual Amount on (15 773 304) 16 968 603 1 195 299 1 352 326 157 027 Comparable Basis as Presented in the Budget and Actual Comparative Statement
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1. Presentation of Consolidated Annual Financial Statements
The consolidated annual financial statements have been prepared in accordance with the Standards of Generally Recognised Accounting Practice (GRAP), issued by the Accounting Standards Board in accordance with section 122(3) of the Public Finance Management Act (Act No.1 of 1999).
The consolidated annual financial statements have been prepared on an accrual basis of accounting and are in accordance with the historical cost convention as the basis of measurement. They are presented in South African Rand, which is the functional currency of the group.
These financial statements were prepared, based on the expectation that the group will continue to operate as a going concern for at least the next twelve months.
A summary of the significant accounting policies, which have been consistently applied in the preparation of these consolidated annual financial statements, is disclosed below.
1.1 Consolidation
Basis of consolidation The group controls and consolidates an entity where the group has the power to govern the financial and operating policies of another group entity so as to obtain benefits from its activities.
The results of controlled entities are included in the consolidated annual financial statements from the effective date of acquisition or date when control commences, to the effective date of disposal or date when control ceases. The difference between the proceeds from the disposal of the controlled entity and its carrying amount as of the date of disposal is recognised in the consolidated statement of financial performance as the surplus or deficit on the disposal of the controlled entity.
The consolidated annual financial statements of the group and its controlled entities used in the preparation of the consolidated annual financial statements are prepared as of the same reporting date.
Adjustments are made when necessary to the consolidated annual financial statements of the controlled entities to bring their accounting policies in line with those of the SACAA.
All intra-entity transactions, balances, revenues and expenses are eliminated in full on consolidation.
1.2 Significant judgments and accounting estimates
In preparing the consolidated annual financial statements, management is required to make estimates and assumptions that affect the amounts represented in the consolidated annual financial statements and related disclosures. The use of available information and the application of judgment are inherent in the formation of estimates. Actual results in the future could differ from these estimates, which may be material to the consolidated annual financial statements as new information becomes known, circumstances change or more experience is obtained. Significant judgments include:
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1.2 Significant judgments and accounting estimates | CONTINUED
Loans and receivables The group assesses its loans and receivables for impairment at the end of each reporting period. In determining whether an impairment loss should be recorded in surplus or deficit, the entity makes judgments as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from a financial asset.
Management has applied judgement in estimating the extent of any impairment deemed necessary on the gross carrying value of loans and receivables and has impaired all doubtful accounts in arrears for a period longer than normal expected trading terms. The impairment loss is recognised in surplus or deficit when there is objective evidence that it is impaired.
Fair value estimation The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the group for similar financial instruments.
Impairment testing A cash-generating or non-cash-generating asset is impaired when the carrying amount of the asset exceeds its recoverable amount. These calculations require the use of estimates and assumptions. It is reasonably possible that the assumption may change, which may then have an impact on our estimations and may then require a material adjustment to the carrying value of tangible assets.
The group reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. Assets are grouped at the lowest level at which identifiable cash flows are largely independent of cash flows of other assets and liabilities. If there are indications that impairment may have occurred, estimates are prepared of expected future cash flows for each group of assets. Expected future cash flows used to determine the value in use of tangible assets are inherently uncertain and could materially change over time.
Useful lives of property, plant and equipment The entity determines the estimated useful lives and related depreciation charges for property, plant and equipment. This estimate is based on industry norms. Management will increase the depreciation charge where useful lives are less than previously estimated useful lives.
In estimating the useful lives of the assets, management assesses the present status of the assets and the expected future benefits associated with the continued use of the assets.
Provisions Provisions were raised and management determined an estimate based on the information available, as well as past experience. Additional disclosure of these estimates of provisions is included in the Notes to the Annual Financial Statements under Provisions (Note 12).
1.3 Property, plant and equipment
Property, plant and equipment are tangible non-current assets that are held for use in the production or supply of goods or services, rental to others, or for administrative purposes, and are expected to be used during more than one period.
The cost of an item of property, plant and equipment is recognised as an asset when:
• it is probable that future economic benefits or service potential associated with the item will flow to the group; and • the cost of the item can be measured reliably.
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1.3 Property, plant and equipment | CONTINUED
Property, plant and equipment are initially measured at cost.
The cost of an item of property, plant and equipment is the purchase price and other costs attributable to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Trade discounts and rebates are deducted in arriving at the cost.
Where an asset is acquired through a non-exchange transaction, its cost is its fair value as at date of acquisition.
Where an item of property, plant and equipment is acquired in exchange for a non-monetary asset or monetary assets, or a combination of monetary and non-monetary assets, the asset acquired is initially measured at fair value (the cost). If the acquired item’s fair value was not determinable, it’s deemed cost is the carrying amount of the asset(s) given up.
When significant components of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. The major components are depreciated separately over their useful lives.
Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, or replace part of it.
Recognition of costs in the carrying amount of an item of property, plant and equipment ceases when the item is in the location and condition necessary for it to be capable of operating in the manner intended by management.
Items such as spare parts, standby equipment and servicing equipment are recognised when they meet the definition of property, plant and equipment.
Property, plant and equipment are depreciated on the straight line basis over their expected useful lives to their estimated residual value.
Property, plant and equipment are carried at cost less accumulated depreciation and impairment losses.
The useful lives of items of property, plant and equipment have been assessed as follows:
Aircraft Group 2019 2018 Calibration equipment 15 - 27 years 15 - 27 years Furniture, fixtures and canteen equipment 6 - 22 years 4 - 21 years Computer equipment 5 - 17 years 5 - 16 years Generator and motor vehicles 6 - 15 years 6 - 15 years Leasehold improvements Period of lease Period of lease
Aircraft 2019 2018 Airframe 6 years 7 years Left engine 751 hours 1 046 hours Right engine 805 hours 1 099 hours Avionics 2.5 years 3.5 years Undercarriage 18 051 cycles 18 205 cycles Interior 1 year 1 year
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1.3 Property, plant and equipment | CONTINUED
The assets’ residual values, useful lives and depreciation methods are reviewed at the end of each reporting date and change(s) is/ are accounted for as a change in accounting estimate in accordance with the relevant standard of GRAP.
Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately.
The depreciation charge for each period is recognised in surplus or deficit.
Items of property, plant and equipment are derecognised when the asset is disposed of or when there are no further economic benefits or service potential expected from the use of the asset.
The gain or loss arising from the derecognition of an item of property, plant and equipment is included in surplus or deficit when the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.
1.4 Intangible assets
An intangible asset is identifiable if it either: • is separable, i.e. is capable of being separated or divided from the group and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, identifiable assets or liability, regardless of whether the Group intends to do so; or • arises from binding arrangements (including rights from contracts), regardless of whether those rights are transferable or separable from the group or from other rights and obligations.
A binding arrangement describes an arrangement that confers similar rights and obligations on the parties to it, as if it were in the form of a contract.
An intangible asset is recognised when: • it is probable that the expected future economic benefits or service potential that are attributable to the asset will flow to the group; and • the cost or fair value of the asset can be measured reliably.
The group assesses the probability of expected future economic benefits or service potential using reasonable and supportable assumptions that represent management’s best estimate of the set of economic conditions that will exist over the useful life of the asset.
Where an intangible asset is acquired through a non-exchange transaction, its initial cost at the date of acquisition is measured at its fair value as at that date. Expenditure on research (or on the research phase of an internal project) is recognised as an expense when it is incurred.
Intangible assets are carried at cost less any accumulated amortisation and any impairment losses. Amortisation of the asset begins when development is complete and the asset is available for use. It is amortised over the period of expected future benefit.
Amortisation is provided to write off the cost of the intangible assets over their estimated useful lives, using the straight-line method.
Group 2019 2018 Computer Software 5 - 24 years 5 - 17 years
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1.4 Intangible assets | CONTINUED
Intangible assets are derecognised: • on disposal; or • when no future economic benefits or service potential are expected from its use or disposal.
The gain or loss arising from the derecognition of an intangible assets is included in surplus or deficit when the asset is derecognised.
1.5 Financial instruments
Classification
The group has the following types of financial assets (classes and category) as reflected on the face of the statement of financial position or in the notes thereto:
Class Category Trade and other receivables Financial asset measured at amortised cost Cash and cash equivalents Financial asset measured at amortised cost
The group has the following types of financial liabilities (classes and category) as reflected on the face of the statement of financial position or in the notes thereto: Class Category Trade and other payables Financial liability measured at amortised cost Operating lease liability Financial liability measured at amortised cost
Initial recognition The group recognises a financial asset or a financial liability in its statement of financial position when the group becomes a party to the contractual provisions of the instrument.
The group recognises financial assets using trade date accounting.
Initial measurement of financial assets and financial liabilities The group measures a financial asset and financial liability initially at its fair value plus transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability.
Subsequent measurement of financial assets and financial liabilities The group measures all financial assets and financial liabilities after initial recognition using the following categories: • Financial instruments at fair value. • Financial instruments at amortised cost. • Financial instruments at cost.
All financial assets measured at amortised cost, or cost, are subject to an impairment review.
Gains and losses For financial assets and financial liabilities measured at amortised cost or cost, a gain or loss is recognised in surplus or deficit when the financial asset or financial liability is derecognised or impaired, or through the amortisation process.
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1.5 Financial instruments | CONTINUED
Impairment and uncollectibility of financial assets The group assesses at the end of each reporting period whether there is any objective evidence that a financial asset or group of financial assets is impaired.
Objective evidence of impairment includes: • long overdue amounts for which further collection procedures have been regarded as uneconomical; • information received about the debtor indicating their inability to settle the debt; or • legal action has been instituted to recover the amount owing.
Financial assets measured at amortised cost:
If there is objective evidence that an impairment loss on financial assets measured at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced directly. The amount of the loss is recognised in surplus or deficit.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed directly. The reversal does not result in a carrying amount of the financial asset that exceeds what the amortised cost would have been had the impairment not been recognised at the date when the impairment is reversed. The amount of the reversal is recognised in surplus or deficit.
Derecognition
Financial assets The group derecognises a financial asset only when: • the contractual rights to the cash flows from the financial asset expire, are settled or waived; • the group transfers to another party substantially all of the risks and rewards of ownership of the financial asset; or • the group, despite having retained some significant risks and rewards of ownership of the financial asset, has transferred control of the asset to another party and the other party has the practical ability to sell the asset in its entirety to an unrelated third party, and is able to exercise that ability unilaterally and without needing to impose additional restrictions on the transfer. In this case, the group: • derecognises the asset; and • recognises separately any rights and obligations created or retained in the transfer.
On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received is recognised in surplus or deficit.
Financial liabilities The group removes a financial liability (or a part of a financial liability) from its statement of financial position when it is extinguished, i.e. when the obligation specified in the contract is discharged, cancelled, expires or is waived.
An exchange between an existing borrower and lender of debt instruments with substantially different terms is accounted for as having extinguished the original financial liability and a new financial liability is recognised. Similarly, a substantial modification of the terms of an existing financial liability or a part of it is accounted for as having extinguished the original financial liability and having recognised a new financial liability.
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1.5 Financial instruments | CONTINUED
The difference between the carrying amount of a financial liability (or part of a financial liability) extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in surplus or deficit. Any liabilities that are waived, forgiven or assumed by another entity by way of a non-exchange transaction are accounted for in accordance with the Standard of GRAP on Revenue from Non-exchange Transactions (Taxes and Transfers).
Presentation Interest relating to a financial instrument or a component that is a financial liability is recognised as revenue or expense in surplus or deficit.
Dividends or similar distributions relating to a financial instrument or a component that is a financial liability is recognised as revenue or expense in surplus or deficit.
Losses and gains relating to a financial instrument or a component that is a financial liability is recognised as revenue or expense in surplus or deficit.
A financial asset and a financial liability are only offset and the net amount presented in the statement of financial position when the group currently has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
1.6 Leases
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.
When a lease includes both land and buildings elements, the group assesses the classification of each element separately.
Finance leases - lessee Finance leases are recognised as assets and liabilities in the statement of financial position at amounts equal to the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation.
The discount rate used in calculating the present value of the minimum lease payments is the interest rate implicit in the lease.
Minimum lease payments are apportioned between the finance charge and reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of return on the remaining balance of the liability.
Any contingent rents are expensed in the period in which they are incurred.
The finance lease liabilities are derecognised when the entity’s obligation to settle the liability is extinguished. The assets capitalised under the finance lease are derecognised when the group no longer expects any economic benefits or service potential to flow from the asset.
Operating leases - lessee Operating lease payments are recognised as an expense on a straight-line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments is recognised as an operating lease asset or liability.
The operating lease liability is derecognised when the group’s obligation to settle the liability is extinguished. The operating lease asset is derecognised when the group no longer anticipates economic benefits to flow from the asset.
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1.7 Consumable stores
Consumable stores are initially measured at cost, except where consumable stores are acquired through a non-exchange transaction, then their costs are their fair value as at the date of acquisition.
Consumable stores comprise of ID licence cards held for issuance to the aviation stakeholders and various people in the aviation value chain.
Subsequently consumable stores are measured at the lower of cost and net realisable value.
1.8 Impairment of cash-generating assets
Cash-generating assets are assets managed with the objective of generating a commercial return. A commercial return means that future cash flows are expected to be significantly higher than the cost of the asset.
Impairment is a loss in the future economic benefits or service potential of an asset, over and above the systematic recognition of the loss of the asset’s future economic benefits or service potential through depreciation (amortisation).
Carrying amount is the amount at which an asset is recognised in the statement of financial position after deducting any accumulated depreciation and accumulated impairment losses thereon.
A cash-generating unit is the smallest identifiable group of assets managed with the objective of generating a commercial return that generates cash inflows from continuing use that is largely independent of the cash inflows from other assets or groups of assets.
Costs of disposal are incremental costs directly attributable to the disposal of an asset, excluding finance costs and income tax expense.
Depreciation (Amortisation) is the systematic allocation of the depreciable amount of an asset over its useful life.
Fair value less costs to sell is the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal.
A recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value in use.
Useful life is either:
(a) the period of time over which an asset is expected to be used by the group; or (b) the number of production or similar units expected to be obtained from the asset by the group.
Criteria developed by the group to distinguish cash-generating assets from non-cash-generating assets are as follows:
Identification When the carrying amount of a cash-generating asset exceeds its recoverable amount, it is impaired.
The group assesses at each reporting date whether there is any indication that a cash-generating asset may be impaired. If any such indication exists, the group estimates the recoverable amount of the asset. Reversal of impairment loss The group assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for a cash-generating asset may no longer exist or may have decreased. If any such indication exists, the SACAA estimates the recoverable amount of that asset.
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1.8 Impairment of cash-generating assets | CONTINUED
An impairment loss recognised in prior periods for a cash-generating asset is reversed if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying amount of the asset is increased to its recoverable amount. The increase is a reversal of an impairment loss. The increased carrying amount of an asset attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined (net of depreciation or amortisation) had no impairment loss been recognised for the asset in prior periods.
A reversal of an impairment loss for a cash-generating asset is recognised immediately in surplus or deficit.
Any reversal of an impairment loss of a revalued cash-generating asset is treated as a revaluation increase.
After a reversal of an impairment loss is recognised, the depreciation (amortisation) charge for the cash-generating asset is adjusted in future periods to allocate the cash-generating asset’s revised carrying amount, less its residual value (if any), on a systematic basis over its remaining useful life.
1.9 Impairment of non-cash-generating assets
Non-cash-generating assets are assets other than cash-generating assets.
Impairment is a loss in the future economic benefits or service potential of an asset, over and above the systematic recognition of the loss of the asset’s future economic benefits or service potential through depreciation (amortisation).
Carrying amount is the amount at which an asset is recognised in the statement of financial position after deducting any accumulated depreciation and accumulated impairment losses thereon.
Costs of disposal are incremental costs directly attributable to the disposal of an asset, excluding finance costs and income tax expense.
Depreciation (amortisation) is the systematic allocation of the depreciable amount of an asset over its useful life.
Fair value less costs to sell is the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal.
A recoverable amount of an asset or a non-cash-generating unit is the higher of its fair value less costs to sell and its value-in-use.
Useful life is either: (a) the period of time over which an asset is expected to be used by the group; or (b) the number of production or similar units expected to be obtained from the asset by the group.
Identification When the carrying amount of a non-cash-generating asset exceeds its recoverable service amount, it is impaired.
The group assesses at each reporting date whether there is any indication that a non-cash-generating asset may be impaired. If any such indication exists, the group estimates the recoverable service amount of the asset.
Reversal of an impairment loss The group assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for a non-cash-generating asset may no longer exist or may have decreased. If any such indication exists, the group estimates the recoverable service amount of that asset.
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1.9 Impairment of non-cash-generating assets | CONTINUED
An impairment loss recognised in prior periods for a non-cash-generating asset is reversed if there has been a change in the estimates used to determine the asset’s recoverable service amount since the last impairment loss was recognised. The carrying amount of the asset is increased to its recoverable service amount. The increase is a reversal of an impairment loss. The increased carrying amount of an asset attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined (net of depreciation or amortisation) had no impairment loss been recognised for the asset in prior periods.
A reversal of an impairment loss for a non-cash-generating asset is recognised immediately in surplus or deficit.
Any reversal of an impairment loss of a revalued non-cash-generating asset is treated as a revaluation increase.
After a reversal of an impairment loss is recognised, the depreciation (amortisation) charge for the non-cash-generating asset is adjusted in future periods to allocate the non-cash-generating asset’s revised carrying amount, less its residual value (if any), on a systematic basis over its remaining useful life.
1.10 Employee benefits
Employee benefits are all forms of consideration given by the group in exchange for services rendered by employees.
Short-term employee benefits Short-term employee benefits are employee benefits payable within the financial year or that are due to be settled within twelve months after the end of the period in which the employees render the related service.
Short-term employee benefits include items such as: • wages, salaries and social security contributions; • short-term compensated absences (such as paid annual leave and paid sick leave) where the compensation for the absences is due to be settled within twelve months after the end of the reporting period in which the employees render the related employee service; • bonus, incentive and performance-related payments payable within twelve months after the end of the reporting period in which the employees render the related service; and • non-monetary benefits (for example, medical care, and free or subsidised goods or services such as housing, cars and cellphones) for current employees.
When an employee has rendered service to the group during a reporting period, the group recognises the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service: • as a liability (accrued expense), after deducting any amount already paid. If the amount already paid exceeds the undiscounted amount of the benefits, the group recognises that excess as an asset (prepaid expense) to the extent that the prepayment will lead to, for example, a reduction in future payments or a cash refund; and • as an expense, unless another Standard requires or permits the inclusion of the benefits in the cost of an asset.
The expected cost of compensated absences is recognised as an expense, as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs. The group measures the expected cost of accumulating compensated absences as the additional amount that the Group expects to pay as a result of the unused entitlement that has accumulated at the reporting date.
The group recognises the expected cost of bonus, incentive and performance-related payments when the group has a present legal or constructive obligation to make such payments as a result of past events and a reliable estimate of the obligation can be made. A present obligation exists when the Group has no realistic alternative but to make the payments.
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1.10 Employee benefits | CONTINUED
Post-employment benefits: Defined contribution plans
The SACAA provides post-employment benefits for its employees. Defined contribution plans are post-employment benefit plans under which the group pays fixed contributions into a separate fund and will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods.
When an employee has rendered service to the group during a reporting period, the group recognises the contribution payable to a defined contribution plan in exchange for that service: • as a liability (accrued expense), after deducting any contribution already paid; and • as an expense, unless another Standard requires or permits the inclusion of the contribution in the cost of an asset.
1.11 Provisions and contingencies
Provisions are recognised when: • the group has a present obligation as the result of a past event; • it is probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligation; and • a reliable estimate can be made of the obligation.
The amount of a provision is the best estimate of the expenditure expected to be required to settle the present obligation at the reporting date.
Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. Provisions are reversed if it is no longer probable that an outflow of resources embodying economic benefits or service potential will be required, to settle the obligation.
A provision is used only for expenditures for which the provision was originally recognised.
Provisions are not recognised for future operating deficits.
If the group has a contract that is onerous, the present obligation (net of recoveries) under the contract is recognised and measured as a provision.
Contingent assets and contingent liabilities are not recognised. Contingencies are disclosed in note 25.
1.12 Revenue recognition from exchange transactions
Revenue is the gross inflow of economic benefits or service potential during the reporting period when those inflows result in an increase in net assets, other than increases relating to contributions from owners.
An exchange transaction is one in which the Group receives assets or services, or has liabilities extinguished, and directly gives approximately equal value (primarily in the form of goods, services or use of assets) to the other party in exchange.
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.
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Measurement Revenue is measured at the fair value of the consideration received or receivable, net of trade discounts and volume rebates.
Other income Other income comprises of fees that are collected and not related to the mandate of the SACAA.
Interest Revenue arising from the use by others of the group’s assets yielding interest is recognised when: • it is probable that the economic benefits or service potential associated with the transaction will flow to the group, and • the amount of the revenue can be measured reliably.
Interest is recognised, in surplus or deficit, using the effective interest rate method.
1.13 Revenue recognition from non-exchange transactions
Revenue is the gross inflow of economic benefits or service potential during the reporting period, when those inflows result in an increase in net assets, other than increases relating to contributions from owners.
Non-exchange transactions are defined as transactions where the group receives value from another entity without directly giving approximately equal value in exchange.
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.
Measurement The invoice value of sales and services rendered, excluding value-added tax in respect of trading operations, is recognised at the date on which services are provided.
The safety charge is based on the number of passengers on scheduled services departing from all airports in the country. This data is obtained from the scheduled airlines and verified by data received from airports.
Fuel levies are based on litres of aviation fuel sold by fuel wholesalers and verified biannually by independent external auditors appointed by SACAA.
Accident and incident investigation fees are received from the Department of Transport on a cost-recovery basis negotiated annually in advance.
User fees are generated from examinations, licence renewals, certifications, airworthiness and calibrations. The revenue is recognised when the service is rendered.
1.14 Translation of foreign currencies
Foreign currency transactions A foreign currency transaction is recorded, on initial recognition in Rands, by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction.
At each reporting date, foreign currency monetary items are translated using the closing rate.
Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous consolidated annual financial statements are recognised in surplus or deficit in the period in which they arise.
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1.14 Translation of foreign currencies | CONTINUED
Cash flows arising from transactions in a foreign currency are recorded in Rands by applying to the foreign currency amount the exchange rate between the Rand and the foreign currency at the date of the cash flow.
1.15 Fruitless and wasteful expenditure
Fruitless and wasteful expenditure is expenditure which was made in vain and would have been avoided had reasonable care been exercised.
All expenditure relating to fruitless and wasteful expenditure is recognised as an expense in the statement of financial performance in the year that the expenditure was incurred. The expenditure is classified in accordance with the nature of the expense, and where recovered, it is subsequently accounted for as revenue in the statement of financial performance.
1.16 Irregular expenditure
Irregular expenditure is expenditure that is contrary to the Public Finance Management Act (PFMA) or in contravention of the group’s supply chain management policies. Irregular expenditure excludes unauthorised expenditure. Irregular expenditure is disclosed as such in the notes to the annual financial statements and where recovered, it is subsequently accounted for as revenue inthe statement of financial performance.
1.17 Segment information
A segment is an activity of an entity: • that generates economic benefits or service potential (including economic benefits or service potential relating to transactions between activities of the same entity); • whose results are regularly reviewed by management to make decisions about resources to be allocated to that activity and in assessing its performance; and • for which separate financial information is available.
Reportable segments are the actual segments on which reports are made in the segment report. They are the segments identified above or alternatively an aggregation of two or more of those segments where the aggregation criteria are met.
The SACAA is a statutory body, which has the primary focus to control and regulate civil aviation in the Republic of South Africa and to oversee the functioning and development of the civil aviation industry. Although revenues do have certain streams, they are not related to any segments or specific divisions within SACAA. SACAA’s expenditure relates mainly to salaries and the rest relates to operational activities and cannot be linked to any specific segments. Resources are not allocated, nor is reporting done or performance measured for any separate activities.
Management is of the opinion that any attempt to divide the SACAA into further separate activities or geographical information will not add any additional value to its stakeholders. The entire SACAA is viewed as a single reportable segment.
1.18 Budget information
The SACAA is typically subject to budgetary limits in the form of budget authorisations, which are given effect through authorising legislation.
General purpose financial reporting by the group shall provide information on whether resources were obtained and usedin accordance with the legally adopted budget.
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The approved budget is prepared on an accrual basis and presented by economic classification linked to performance outcome objectives.
The approved budget covers the fiscal period from 01 April 2018 to 31 March 2019.
The consolidated annual financial statements and the budget are compiled on the same basis of accounting, therefore a comparison with the budgeted amounts for the reporting period have been included in the Statement of comparison of budget and actual amounts.
An explanation is provided for all variances between actual and budgeted amounts above 5% or in excess of R2 million in the notes to the financial statements.
1.19 Related Parties
The group has processes in place to aid in the identification of related parties. Related parties are defined as persons or entities with the ability to control or jointly control the other party, or exercise significant influence over the other party, or vice versa, or an entity that is subject to common control, or joint control.
The Department of Transport was identified as being able to exercise significant influence over the SACAA. As a result, all other entities under the same influence are regarded as related parties.
1.20 Taxation
The SACAA is exempt from taxation in terms of the provision of section 10(1)(CA)(i) of the Income Tax Act, 1962 (Act no. 58 of 1962).
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2. New standards and interpretations
2.1 Standards and interpretations issued, but not yet effective
The Group has not applied the following standards and interpretations, which have been published and are mandatory for the Group’s accounting periods beginning on or after 01 April 2019 or later periods:
Standard/ Interpretation: Effective date: Expected impact: Years beginning on or after Not expected to impact results • GRAP 20: Related parties 01 April 2019 but may result in additional disclosure Not expected to have a • GRAP 32: Service Concession Arrangements: Grantor 01 April 2019 material impact
Not expected to have a • GRAP 108: Statutory Receivables 01 April 2019 material impact
Not expected to have a • GRAP 109: Accounting by Principals and Agents 01 April 2019 material impact
• IGRAP 17: Service Concession Arrangements where a Grantor Not expected to have a 01 April 2019 Controls a Significant Residual Interest in an Asset material impact
3. Cash and cash equivalents
Cash and cash equivalents consist of:
Description Group SACAA 2019 2018 2019 2018 R R R R Cash on hand 3 000 5 000 3 000 3 000 Bank balances 7 884 754 9 267 492 7 629 384 9 173 229 Short-term deposits 292 219 854 297 067 095 292 067 247 296 388 265 300 107 608 306 339 587 299 699 631 305 564 494
Cash and cash equivalents held have not been encumbered.
Credit quality of bank balances and short-term deposits, excluding cash on hand
The credit quality of bank balances and short-term deposits is the credit rating of financial institutions. Cash and cash equivalents attract interest at variable rates linked to prime.
The credit quality of bank balances and short-term deposits, excluding cash on hand that is neither past due nor impaired can be assessed/monitored by reference to historical information about counterparty default rates. Furthermore, the credit quality of bank balances and short-term deposits is ensured by only contracting with highly reputable financial institutions registered in terms of the Banks Act of South Africa, 1990 (Act No. 94 of 1990) and endorsed by National Treasury.
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4. Trade and other receivables from non-exchange transactions
Description Group SACAA 2019 2018 2019 2018 R R R R Trade receivables 70 664 806 65 115 607 70 634 125 65 080 604 Provision for impairment of trade and other (9 524 770) (9 278 400) (9 524 770) (9 278 400) receivables Unallocated receipts (283 353) (430 601) (283 353) (430 601) Other debtors 3 309 675 1 302 840 3 306 896 1 298 607 Prepayments 8 214 417 1 659 863 8 214 417 1 659 863 Deposits 1 947 347 1 947 347 1 947 347 1 947 347 Staff advances 130 208 61 700 127 383 61 700 74 458 330 60 378 356 74 422 045 60 339 120
Trade receivables are carried at cost, which normally approximates their fair value due to the short-term maturity thereof. An adjustment for the impairment of receivables has been made for estimated irrecoverable amounts.
Trade receivables ageing
Description Group SACAA 2019 2018 2019 2018 R R R R Current 55 047 711 48 012 961 55 038 507 47 973 714 0 to 30 days 1 592 218 4 495 998 1 592 128 4 495 090 31 to 60 days 2 325 529 972 522 2 325 403 971 101 61 to 90 days 2 271 137 1 317 584 2 269 501 1 314 399 Over 90 days 9 428 211 10 316 542 9 408 586 10 326 300 70 664 806 65 115 607 70 634 125 65 080 604
Credit quality of trade and other receivables
The credit quality of trade and other receivables that are neither past due nor impaired, can be assessed by reference to historical information about counterparty default rates as well as payment history.
None of the financial assets that are fully performing have been renegotiated in the last year.
Fair value of trade and other receivables
Group SACAA 2019 2018 2019 2018 Description R R R R Trade and other receivables 74 458 330 60 378 356 74 422 045 60 339 120
The Board considers the carrying amount of trade and other receivables to approximate fair value.
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4. Trade and other receivables from non-exchange transactions | CONTINUED
Trade and other receivables past due but not impaired
On 31 March 2019 the group and SACAA trade and other receivables of R 8 044 063 (2018: R 8 867 203) and R 8 022 586 (2018: R 8 861 690) respectively were past due but not impaired.
The ageing of amounts past due, but not impaired, is as follows:
Description Group SACAA 2019 2018 2019 2018 R R R R One month past due 1 583 794 4 495 998 1 583 704 4 495 090 Two months past due 2 100 336 962 522 2 100 210 961 101 Three months past due 1 971 752 1 317 583 1 970 116 1 314 399 Older than three months past due 2 388 181 2 091 100 2 368 556 2 091 100 8 044 063 8 867 203 8 022 586 8 861 690
Trade and other receivables impaired
As at 31 March 2019 the group and SACAA trade and other receivables of R 9 524 770 (2018: R 9 278 400) were impaired and provided for.
The ageing of these receivables is as follows:
Description Group SACAA 2019 2018 2019 2018 R R R R Less than one month past due 8 423 - 8 423 - Less than two months past due 225 193 - 225 193 - Less than three months past due 299 386 - 299 386 - Over three months past due 8 991 768 9 278 400 8 991 768 9 278 400 9 524 770 9 278 400 9 524 770 9 278 400
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4. Trade and other receivables from non-exchange transactions | CONTINUED
Reconciliation of provision for impairment of trade and other receivables
Description Group SACAA 2019 2018 2019 2018 R R R R Opening balance 9 278 400 12 644 804 9 278 400 12 644 804 Increase in provision 1 122 854 - 1 122 854 - Decrease in provision (876 484) (3 366 404) (876 484) (3 366 404) 9 524 770 9 278 400 9 524 770 9 278 400
The creation and release of provision for impaired receivables have been included in surplus for the year.
The maximum exposure to credit risk at the reporting date is the fair value of each class of trade and other receivable balances mentioned above. The group does not hold any collateral as security.
5. Trade and other receivables from exchange transactions
Description Group SACAA 2019 2018 2019 2018 R R R R Trade and other receivables from exchange 970 425 - 970 425 - transactions
Trade and other receivables from exchange transactions are carried at cost, which normally approximates to the short-term maturity thereof.
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5. Trade and other receivables from exchange transactions | CONTINUED
As at the end of the year, the trade receivables ageing were as follows:
Description Group SACAA 2019 2018 2019 2018 R R R R 0 to 30 days 178 395 - 178 395 - 31 to 60 days 439 239 - 439 239 - Over 90 days 352 791 - 352 791 - 970 425 - 970 425 -
Trade and other receivables past due but not impaired
On 31 March 2019 the group and SACAA trade and other receivables of R970 425 (2018: R-) were past due but not impaired.
The ageing of amounts past due but not impaired is as follows:
Description Group SACAA 2019 2018 2019 2018 R R R R One month past due 178 395 - 178 395 - Two months past due 439 239 - 439 239 - Older than three months past due 352 791 - 352 791 - 970 425 - 970 425 -
6. Consumable stores
Description Group SACAA 2019 2018 2019 2018 R R R R ID licence card consumables 1 078 845 - 1 078 845 -
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7. Property, plant and equipment
Group 2019 2018 Cost Accumulated Carrying Cost Accumulated Carrying R depreciation value depreciation value R R R R R Leasehold improvements 169 253 (35 261) 133 992 169 253 (7 052) 162 201 Furniture and fixtures 16 280 670 (10 360 688) 5 919 982 15 031 754 (10 034 167) 4 997 587 Motor vehicles 4 168 624 (2 255 770) 1 912 854 3 655 638 (2 169 680) 1 485 958 Computer equipment 29 945 272 (13 382 961) 16 562 311 23 902 047 (13 444 966) 10 457 081 Generator 1 097 633 (457 868) 639 765 1 097 633 (384 693) 712 940 Aircraft 22 430 016 (16 108 323) 6 321 693 22 430 017 (14 636 756) 7 793 261 Calibration equipment 27 700 732 (17 305 825) 10 394 907 27 700 731 (16 196 978) 11 503 753 Canteen equipment 178 745 (112 132) 66 613 178 745 (102 659) 76 086 101 970 945 (60 018 828) 41 952 117 94 165 818 (56 976 951) 37 188 867
SACAA 2019 2018 Cost Accumulated Carrying Cost Accumulated Carrying R depreciation value depreciation value R R R R R Leasehold improvements 169 253 (35 261) 133 992 169 253 (7 052) 162 201 Furniture and fixtures 15 932 269 (10 068 517) 5 863 752 14 678 952 (9 761 443) 4 917 509 Motor vehicles 3 694 767 (1 915 563) 1 779 204 3 181 781 (1 888 873) 1 292 908 Computer equipment 29 815 529 (13 254 577) 16 560 952 23 764 725 (13 321 978) 10 442 747 Generator 1 097 633 (457 868) 639 765 1 097 633 (384 693) 712 940 Aircraft 22 430 016 (16 108 323) 6 321 693 22 430 017 (14 636 756) 7 793 261 Calibration equipment 27 700 732 (17 305 825) 10 394 907 27 700 731 (16 196 978) 11 503 753 Canteen equipment 178 745 (112 132) 66 613 178 745 (102 659) 76 086 101 018 944 (59 258 066) 41 760 878 93 201 837 (56 300 432) 36 901 405
138 Annual Report 2018 | 2019 PART E - Financial Statements PART A General Information Consolidated Annual Financial Statements for the year ended 31 March 2019
7. Property, plant and equipment | CONTINUED
Reconciliation of property, plant and equipment - Group - 2019
Group ‑ 2019 Opening balance Additions Disposals Depreciation Total R R R R R Leasehold improvements 162 201 - - (28 209) 133 992 Furniture and fixtures 4 997 587 1 795 106 (68 560) (804 151) 5 919 982 Motor vehicles 1 485 958 1 028 388 (95 403) (506 089) 1 912 854 Computer equipment 10 457 081 8 290 451 (228 608) (1 956 613) 16 562 311 Generator 712 940 - - (73 175) 639 765 Aircraft 7 793 261 - - (1 471 568) 6 321 693 Calibration equipment 11 503 753 - - (1 108 846) 10 394 907 Canteen equipment 76 086 - - (9 473) 66 613 37 188 867 11 113 945 (392 571) (5 958 124) 41 952 117
Reconciliation of property, plant and equipment - Group - 2018
Group ‑ 2018 Opening balance Additions Disposals Depreciation Total R R R R R Leasehold improvements - 169 253 - (7 052) 162 201 Furniture and fixtures 5 531 195 1 328 713 (218 060) (1 644 261) 4 997 587 Motor vehicles 2 066 378 - - (580 420) 1 485 958 Computer equipment 11 842 905 3 635 677 (464 525) (4 556 976) 10 457 081 Generator 786 116 - - (73 176) 712 940 Aircraft 8 197 401 1 046 795 - (1 450 935) 7 793 261 Calibration equipment 12 614 122 - - (1 110 369) 11 503 753 Canteen equipment 58 865 45 914 (1 621) (27 072) 76 086 41 096 982 6 226 352 (684 206) (9 450 261) 37 188 867
Annual Report 2018 | 2019 139 PART A PART PART E - Financial Statements General Information General Consolidated Annual Financial Statements for the year ended 31 March 2019
7. Property, plant and equipment | CONTINUED
Reconciliation of property, plant and equipment - SACAA - 2019
SACAA ‑ 2019 Opening balance Additions Disposals Depreciation Total R R R R R Leasehold improvements 162 201 - - (28 209) 133 992 Furniture and fixtures 4 917 509 1 795 106 (67 297) (781 566) 5 863 752 Motor vehicles 1 292 908 1 028 388 (95 403) (446 689) 1 779 204 Computer equipment 10 442 747 8 290 451 (228 608) (1 943 638) 16 560 952 Generator 712 940 - - (73 175) 639 765 Aircraft 7 793 261 - - (1 471 568) 6 321 693 Calibration equipment 11 503 753 - - (1 108 846) 10 394 907 Canteen equipment 76 086 - - (9 473) 66 613 36 901 405 11 113 945 (391 308) (5 863 164) 41 760 878
Reconciliation of property, plant and equipment - SACAA - 2018
SACAA ‑ 2018 Opening balance Additions Disposals Depreciation Total R R R R R Leasehold improvements - 169 253 - (7 052) 162 201 Furniture and fixtures 5 423 542 1 318 748 (207 651) (1 617 130) 4 917 509 Motor vehicles 1 813 927 - - (521 019) 1 292 908 Computer equipment 11 809 082 3 635 677 (464 525) (4 537 487) 10 442 747 Generator 786 116 - - (73 176) 712 940 Aircraft 8 197 401 1 046 795 - (1 450 935) 7 793 261 Calibration equipment 12 614 122 - - (1 110 369) 11 503 753 Canteen equipment 58 865 45 914 (1 621) (27 072) 76 086 40 703 055 6 216 387 (673 797) (9 344 240) 36 901 405
140 Annual Report 2018 | 2019 PART E - Financial Statements PART A General Information Consolidated Annual Financial Statements for the year ended 31 March 2019
7. Property, plant and equipment | CONTINUED
Expenditure incurred to repair and maintain property, plant and equipment
Description Group SACAA 2019 2018 2019 2018 R R R R Expenditure incurred to repair and maintain property, plant and equipment included in Statement of Financial Performance Motor vehicles repairs and maintenance 66 128 65 620 - - Aircraft repairs and maintenance 5 949 221 3 471 996 5 949 221 3 471 996 Calibration equipment repairs and maintenance 1 634 167 2 080 285 1 634 167 2 080 285 Other operational repairs and maintenance 2 715 192 2 644 397 2 698 158 2 623 802 10 364 708 8 262 298 10 281 546 8 176 083
8. Intangible assets
Group 2019 2018 Cost Accumulated Carrying Cost Accumulated Carrying depreciation value depreciation value R R R R R R Computer software 71 306 714 (10 580 041) 60 726 673 42 474 617 (7 565 109) 34 909 508 Work in progress* 13 392 521 - 13 392 521 37 659 111 - 37 659 111 84 699 235 (10 580 041) 74 119 194 80 133 728 (7 565 109) 72 568 619
SACAA 2019 2018 Cost Accumulated Carrying Cost Accumulated Carrying depreciation value depreciation value R R R R R R Computer software 71 221 534 (10 494 861) 60 726 673 42 389 437 (7 480 414) 34 909 023 Work in progress* 13 392 521 - 13 392 521 37 659 111 - 37 659 111 84 614 055 (10 494 861) 74 119 194 80 048 548 (7 480 414) 72 568 134
Annual Report 2018 | 2019 141 PART A PART PART E - Financial Statements General Information General Consolidated Annual Financial Statements for the year ended 31 March 2019
8. Intangible assets | CONTINUED
Reconciliation of intangible assets - Group - 2019
Group 2019 Opening Additions Transfers Amortisation Total balance R R R R R Computer software 34 909 508 700 386 28 131 711 (3 014 932) 60 726 673 Work in progress* 37 659 111 3 865 121 (28 131 711) - 13 392 521 72 568 619 4 565 507 - (3 014 932) 74 119 194
Reconciliation of intangible assets - Group - 2018
Opening Additions Transfers Amortisation Total balance Group 2018 R R R R R Computer software 15 777 049 1 720 572 18 102 820 (690 933) 34 909 508 Work in progress* 41 253 889 14 508 042 (18 102 820) - 37 659 111 57 030 938 16 228 614 - (690 933) 72 568 619
Reconciliation of intangible assets - SACAA - 2019
SACAA 2019 Opening Additions Transfers Amortisation Total balance R R R R R Computer software 34 909 023 700 386 28 131 711 (3 014 447) 60 726 673 Work in progress* 37 659 111 3 865 121 (28 131 711) - 13 392 521 72 568 134 4 565 507 - (3 014 447) 74 119 194
Reconciliation of intangible assets - SACAA - 2018
SACAA 2018 Opening Additions Transfers Amortisation Total balance R R R R R Computer software 15 768 858 1 720 572 18 102 820 (683 227) 34 909 023 Work in progress* 41 253 889 14 508 042 (18 102 820) - 37 659 111 57 022 747 16 228 614 - (683 227) 72 568 134
• Work in progress includes ID Licence Card System of R 883 707 as well as software licence and installation costs of the Enterprise Business System (EBS) of R12 508 814. As the phases of the EBS project are completed and implemented, they are transferred to computer software.
142 Annual Report 2018 | 2019 PART E - Financial Statements PART A General Information Consolidated Annual Financial Statements for the year ended 31 March 2019
9. Change in estimate
Property, plant and equipment
GRAP 17 - Property, plant and equipment requires the review of the residual value and useful life of an asset at least at each financial year-end. The SACAA extended the estimated useful lives of certain assets. The revisions were accounted for prospectively as a change in accounting estimates and as a result, the depreciation charges of the SACAA for the current financial year have been decreased by R3 908 114.
Description Previous Current Net effect carrying value carrying value R R R Computer software 1 455 325 1 971 161 515 836 Computer equipment 6 800 339 9 105 559 2 305 220 Furniture and fixtures 5 506 763 6 486 330 979 567 Motor vehicles 552 407 644 597 92 190 Canteen equipment 62 079 77 380 15 301 14 376 913 18 285 027 3 908 114
10. Trade and other payables
Description Group SACAA 2019 2018 2019 2018 Restated Restated R R R R Trade payables 7 418 437 5 757 950 7 351 544 5 756 686 Income received in advance 1 028 433 407 934 1 028 433 407 934 Trade receivables with credit balances 13 718 120 8 147 203 13 682 767 8 143 353 Sundry accruals 29 445 257 36 495 249 29 374 798 36 469 056 Salary-related accruals 423 603 236 284 412 334 236 284 13th Cheque accrual 689 637 597 214 689 637 597 214 Leave pay accrual 23 706 881 25 171 684 23 274 744 24 838 059 76 430 368 76 813 518 75 814 257 76 448 586
The SACAA does not have any long-term liabilities. It currently has sufficient cash reserves to fund its capital and operating expenditure.
Annual Report 2018 | 2019 143 PART A PART PART E - Financial Statements General Information General Consolidated Annual Financial Statements for the year ended 31 March 2019
11. Operating lease liability
Description Group SACAA 2019 2018 2019 2018 R R R R Operating lease liability 1 685 309 966 979 1 685 309 966 979
The operating lease liability relates to the smoothing of the rental lease payment for property rental over the lease period.
12. Provisions
Reconciliation of provisions - Group - 2019
Description Opening Additions Utilised during Total balance the year R R R R Performance bonus provision* 65 745 529 80 000 000 (65 476 416) 80 269 113
Reconciliation of provisions - Group - 2018
Description Opening Additions Utilised during Total balance the year R R R R Performance bonus provision* 57 333 490 60 000 000 (51 587 961) 65 745 529 Provision for directors’ remuneration 2 676 - (2 676) - 57 336 166 60 000 000 (51 590 637) 65 745 529
Reconciliation of provisions - SACAA - 2019
Description Opening Additions Utilised during Total balance the year R R R R Performance bonus provision* 65 745 529 80 000 000 (65 476 416) 80 269 113
Reconciliation of provisions - SACAA - 2018
Description Opening Additions Utilised during Total balance the year R R R R Performance bonus provision* 57 333 490 60 000 000 (51 587 961) 65 745 529
* The performance bonus provision is calculated in line with the remuneration policy as approved by the Board.
144 Annual Report 2018 | 2019 PART E - Financial Statements PART A General Information Consolidated Annual Financial Statements for the year ended 31 March 2019
12. Provisions | CONTINUED
Uncertainties and assumptions
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the obligation at the Statement of Financial Position date. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability.
Performance bonus provision
The performance bonus provision is calculated based on the performance of the SACAA as well as individual performance ratings of each employee for the financial year ended 31 March 2019. This calculation is in line with the remuneration policy.
13. Employee benefit obligations
Defined contribution plan
It is the policy of the SACAA to provide retirement benefits to all of its employees. The defined contribution provident fund, which is subject to the Pensions Fund Act, 1956 (Act No. 24 of 1956) exists for this purpose.
The group is under no obligation to cover any unfunded benefits.
Description Group SACAA 2019 2018 2019 2018 R R R R The amount recognised as an expense for defined 50 471 809 45 504 256 50 471 809 45 504 256 contribution plan is
14. Revenue from non-exchange transactions
Description Group SACAA 2019 2018 2019 2018 R R R R Passenger safety charge* 532 263 061 486 655 307 532 263 061 486 655 307 User fees 101 678 621 94 791 509 99 826 369 93 074 815 Fuel levy 25 583 055 26 569 784 25 583 055 26 569 784 Accident and incident investigation 21 922 932 20 720 720 21 922 932 20 720 720 681 447 669 628 737 320 679 595 417 627 020 626
* The passenger safety charge for the current year increased by 9% as a result of a 1% increase in passenger numbers and an increase in the passenger safety charge fee of 6% from R22.29 to R23.61.
Annual Report 2018 | 2019 145 PART A PART PART E - Financial Statements General Information General Consolidated Annual Financial Statements for the year ended 31 March 2019
15. Interest revenue from exchange transactions
Description Group SACAA 2019 2018 2019 2018 R R R R Interest revenue Financial institutions* 17 983 764 17 056 790 17 949 987 17 006 783 Trade and other receivables 552 408 594 176 552 408 594 176 18 536 172 17 650 966 18 502 395 17 600 959
* Interest revenue from financial institutions increased by 5.4% for the group and by 5.5% for the SACAA as a result of surplus funds being invested and better cash flow management.
16. Other revenue from exchange transactions
Description Group SACAA 2019 2018 2019 2018 R R R R Sundry income 2 451 373 1 563 445 2 327 426 1 413 801 Sponsorship income 2 400 818 1 530 280 2 400 818 1 530 280 Insurance claim received 82 986 64 057 82 986 58 557 4 935 177 3 157 782 4 811 230 3 002 638
Other revenue increased due to higher sponsorship income received in the current year as well as secondment income received from the Department of Transport.
146 Annual Report 2018 | 2019 PART E - Financial Statements PART A General Information Consolidated Annual Financial Statements for the year ended 31 March 2019
17. Personnel cost
Description Group SACAA 2019 2018 2019 2018 R R R R Basic salary* 300 880 507 277 206 331 294 676 394 271 722 968 Bonus** 85 079 933 60 000 000 85 079 933 60 000 000 Pension fund contributions 50 471 809 45 504 256 50 471 809 45 504 256 Medical aid contributions 18 621 623 16 530 713 18 408 664 16 328 883 Other employee benefit costs 10 822 969 8 313 145 10 822 969 8 313 145 Temporary staff 4 829 795 2 049 349 4 829 795 2 049 349 Acting allowances 1 030 402 720 766 1 030 402 720 766 Leave pay provision charge 175 440 6 156 419 76 928 6 156 419 Travel and other allowances 3 841 064 2 292 878 3 841 064 2 286 766 Compensation for occupational injuries and 509 661 1 364 139 500 111 1 352 755 diseases fund Unemployment Insurance Fund 959 402 946 509 929 978 918 889 477 222 605 421 084 505 470 668 047 415 354 196
* Basic salary costs increased by 8.5% for the Group and 8.4% for the SACAA. This increase is as a result of a 7.5% salary increase effective from 1 April 2018 as well as an increase in employee numbers for the year from 537 to 575 for the group and from 518 to 557 for SACAA at the end of the current financial year.
** The bonus provision for the year increased by R25 079 933. The performance bonus is calculated in line with the remuneration policy as approved by the Board. Included in the bonus cost is an amount of R5 080 000 that was paid to the Executives as a retention bonus in the current year.
Annual Report 2018 | 2019 147 PART A PART PART E - Financial Statements General Information General Consolidated Annual Financial Statements for the year ended 31 March 2019
18. Operating expenses
Description Group SACAA 2019 2018 2019 2018 Restated Restated R R R R Aircraft operating expenses 2 977 219 4 098 537 2 977 219 4 098 537 Auditors’ fees 2 251 883 2 359 821 2 207 648 2 320 316 Bank charges 797 090 721 204 750 958 676 589 Bursaries 6 487 032 2 879 283 6 487 032 2 879 283 Cleaning 1 558 661 1 439 808 1 553 756 1 434 771 Conferences, seminars and venue hire 7 310 128 3 107 140 7 282 428 3 070 088 Consulting and professional fees 8 829 392 10 794 001 8 626 977 10 594 456 Consumables 1 028 034 946 720 1 028 034 946 720 Electricity 4 221 152 4 742 082 4 140 228 4 633 774 Fuel and oil 373 340 245 995 373 340 245 995 Insurance 1 633 381 1 620 473 1 229 398 1 553 555 IT expenses 4 573 312 5 006 678 4 467 304 4 908 007 Legal fees 4 569 290 1 368 097 4 558 290 1 368 097 Magazines, books and periodicals 1 502 899 1 082 375 1 453 441 1 036 974 Motor vehicle expenses 21 401 17 633 21 401 17 633 Placement fees 1 189 272 1 530 837 1 189 272 1 530 837 Postage and courier 531 105 572 519 528 108 566 044 Printing and stationery 2 890 888 2 771 212 2 762 420 2 670 794 Public relations 15 741 491 4 937 775 15 735 821 4 899 812 Recreation Aviation Administration of South Africa - - 5 975 160 5 642 256 Refuse 211 270 164 737 211 270 164 737 Regulation development 396 586 539 557 385 036 434 557 Safety and promotion 5 644 230 7 412 530 5 644 230 7 382 530 Security 4 342 959 4 109 945 4 328 184 4 096 354 Skills development levy 4 025 570 3 525 723 3 962 834 3 470 821 Software expenses 19 813 607 14 265 097 19 813 607 14 265 097 Sponsorships 4 450 281 2 629 309 4 450 281 2 629 309 Staff events 1 601 883 1 335 872 1 554 839 1 294 249 Staff welfare 294 012 379 374 293 732 343 335 Telephone and fax 5 276 300 4 457 969 5 211 284 4 381 657 Training 17 843 044 18 068 032 17 800 822 18 019 084 Travel - international 20 538 973 11 562 477 20 491 503 11 526 790 Travel - domestic 20 497 801 18 560 300 20 443 966 18 524 638 Uniforms 712 306 393 414 712 306 393 414 Other expenses 451 883 296 640 451 883 296 640 174 587 675 137 943 166 179 104 012 142 317 750
148 Annual Report 2018 | 2019 PART E - Financial Statements PART A General Information Consolidated Annual Financial Statements for the year ended 31 March 2019
19. Finance costs
Description Group SACAA 2019 2018 2019 2018 R R R R Interest and penalties paid to the South African - 5 448 - 5 448 Revenue Services Other interest paid 272 199 - - 272 5 647 - 5 448
20. Debt impairment and write-off
Description Group SACAA 2019 2018 2019 2018 R R R R Bad debts written off 1 016 912 2 640 396 1 016 912 2 640 396 Increase/(Decrease) in debt impairment provision 246 370 (3 366 404) 246 370 (3 366 404) 1 263 282 (726 008) 1 263 282 (726 008)
21. Taxation
No provision for taxation has been made, as the entity is exempted in terms of section 10 (1) (CA) (i) of the Income Tax Act, 1962 (Act No. 58 of 1962).
22. Auditors’ fees
Description Group SACAA 2019 2018 2019 2018 R R R R Fees 2 225 786 2 310 217 2 181 551 2 270 712 Reimbursive expenses 26 097 49 604 26 097 49 604 2 251 883 2 359 821 2 207 648 2 320 316
Annual Report 2018 | 2019 149 PART A PART PART E - Financial Statements General Information General Consolidated Annual Financial Statements for the year ended 31 March 2019
23. Cash flows from operating activities
Description Group SACAA 2019 2018 2019 2018 R R R R Surplus for the year 1 352 326 44 504 617 2 070 280 44 629 438 Adjustments for: Depreciation and amortisation 8 973 056 10 141 193 8 877 611 10 027 466 Loss on disposal of assets 113 438 609 228 112 175 598 819 Increase/(decrease) in debt impairment provision 246 370 (3 366 404) 246 370 (3 366 404) Movements in operating lease liability 718 330 570 835 718 330 570 835 Movements in provisions 14 523 584 8 409 363 14 523 584 8 412 039 Changes in working capital: Consumable stores (1 078 845) - (1 078 845) - Trade and other receivables from non-exchange (14 079 974) 516 066 (14 082 925) 491 593 transactions Movement in debt impairment added back (246 370) 3 366 404 (246 370) 3 366 404 Trade and other receivables from exchange (970 425) 134 716 (970 425) 134 716 transactions Trade and other payables (383 152) 15 369 276 (634 331) 15 390 581 9 168 338 80 255 294 9 535 454 80 255 487
150 Annual Report 2018 | 2019 PART E - Financial Statements PART A General Information Consolidated Annual Financial Statements for the year ended 31 March 2019
24. Commitments
Authorised capital and maintenance expenditure
Description Group SACAA 2019 2018 2019 2018 R R R R Authorised and contracted for • Property, plant and equipment 296 208 - 296 208 - • Intangible assets 12 554 135 30 068 434 12 554 135 30 068 434 12 850 343 30 068 434 12 850 343 30 068 434
Authorised and not contracted for • Property, plant and equipment 119 036 589 116 000 000 119 036 589 116 000 000
Total capital commitments Authorised and contracted for 12 850 343 30 068 434 12 850 343 30 068 434 Authorised and not contracted for 119 036 589 116 000 000 119 036 589 116 000 000 131 886 932 146 068 434 131 886 932 146 068 434
The capital and maintenance expenditure commitment for intangible assets relates to the installation and implementation of an Enterprise Business System, Empic Pexo Databank and Microsoft Office 365. These costs will be financed by retained surpluses, existing cash resources and funds generated internally.
Included in the capital commitment authorised and not contracted for in property, plant and equipment is the acquisition of an aircraft for an amount of R115 600 800 and an aircraft engine replacement for an amount of R3 435 789 for the Flight Inspection Unit (FIU).
The capital expenditure budget authorised and not contracted for the year ending 31 March 2020 is R88 670 100.
Annual Report 2018 | 2019 151 PART A PART PART E - Financial Statements General Information General Consolidated Annual Financial Statements for the year ended 31 March 2019
24. Commitments | CONTINUED
Operating leases
Description Group SACAA 2019 2018 2019 2018 R R R R Minimum lease payments due - within one year 39 044 759 25 722 707 39 044 759 25 657 668 - in second to fifth year inclusive 178 016 571 9 727 856 178 016 571 9 714 548 - later than five years 348 729 393 - 348 729 393 - 565 790 723 35 450 563 565 790 723 35 372 216
Operating lease payments represent rentals payable by the group and SACAA for certain of its office properties and equipment. Leases are negotiated for an average term of between three to ten years. No contingent rent is payable.
25. Contingencies
The SACAA is currently dealing with a litigation matter relating to a civil claim for damages against it. Summons have been issued by the plaintiff, claiming damages for loss of earnings as well as damages to its business reputation and good name. The SACAA is defending the civil claim and the quantum of this exposure is R 317 500 000. The SACAA is confident that it can successfully defend the suit.
A plaintiff in a suit against seven defendants, of which RAASA is listed as the first, is claiming compensation in the amount of R17 713 398. Based on the legal opinion received from the RAASA legal task team, RAASA is confident that it can successfully defend the suit.
Costs were awarded against the SACAA on two legal matters. The estimated legal costs amount to R545 636 and the actual costs will only be determined once the bill of costs has been taxed by the taxing master.
152 Annual Report 2018 | 2019 PART E - Financial Statements PART A General Information Consolidated Annual Financial Statements for the year ended 31 March 2019
26. Related party balances
Related party balances Loan accounts owing (to)/by related parties Description Group SACAA 2019 2018 2019 2018 R R R R Department of Transport 667 237 (298 288) 667 237 (298 288) South African Airways 62 493 86 106 62 493 86 106 Air Traffic and Navigation Services (2 498 381) 2 713 032 (2 498 381) 2 713 032 Airports Company South Africa (licences) (77 151) 112 427 (77 151) 112 427 SA Express (passenger safety charge and general aviation) 2 978 598 653 689 2 978 598 653 689 Mango Airlines (160 706) 14 966 (160 706) 14 966 972 090 3 281 932 972 090 3 281 932
No expense has been recognised in the current period for impairment of trade receivables in respect of amounts owed by related parties. The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received. The Department of Transport either controls or exercises significant influence over all entities listed as related parties.
Related party transactions Purchases from/(sales to) related parties
Description Group SACAA 2019 2018 2019 2018 R R R R Department of Transport (accidents and incidents) (23 542 000) (22 251 000) (23 542 000) (22 251 000) Department of Transport (secondment allowance) 1 532 177 1 998 589 1 532 177 1 998 589 Air Traffic and Navigation Services (6 710 638) (6 698 538) (6 710 639) (6 698 538) Airports Company South Africa (licences) (1 819 511) (1 810 860) (1 819 511) (1 810 860) Airports Company South Africa (rentals) 2 181 102 1 870 969 2 181 102 1 870 969 South African Airways (76 028 488) (105 098 889) (76 028 488) (105 098 889) SA Express (safety fees and general aviation) (9 272 107) (24 573 877) (9 272 107) (24 573 877) Mango Airlines (safety fees) (90 563 163) (67 931 952) (90 563 163) (67 931 952) Recreation Aviation Administration of South Africa - - 5 975 160 5 642 256 (204 222 628) (224 495 558) (198 247 469) (218 853 302)
These transactions are carried out on commercial terms and conditions.
Annual Report 2018 | 2019 153 PART A PART PART E - Financial Statements General Information General Consolidated Annual Financial Statements for the year ended 31 March 2019
27. Members’ emoluments
Executive Management
Group 2019 Salary Medical Provident Bonuses** Total aid fund R R R R R Ms G Khoza DCA 3 049 496 140 787 538 955 2 687 007 6 416 245 Mr A Seedat Executive: Finance 1 869 744 114 742 365 297 1 321 592 3 671 375 Mr S Segwabe Executive: Aviation Safety 2 093 590 81 618 365 251 1 401 467 3 941 926 Operations Mr G Bestbier Executive: Aviation 2 115 380 70 080 521 578 1 495 363 4 202 401 Infrastructure Ms T Masooa Executive: Human 1 861 856 101 691 296 188 1 258 804 3 518 539 Resources Ms P Gwebu Executive: Corporate 1 471 046 117 849 271 683 1 020 726 2 881 304 Services Mr P Kewana Chief Audit Executive 1 626 691 88 074 295 583 1 120 626 3 130 974 Ms M Mamabolo* Executive: Legal and 1 763 870 67 229 317 512 1 202 680 3 351 291 Aviation Compliance Ms N Naraindath Company Secretary 1 507 865 117 849 283 513 1 094 426 3 003 653 Mr L Gqeke Executive: Aviation 2 139 762 - 365 251 1 376 762 3 881 775 Security Mr P Mashaba Executive: Accident and 1 799 577 47 637 321 456 696 694 2 865 364 Incident Investigation Mr N de Lange Chief Executive: RAASA 1 197 020 36 630 - 220 804 1 454 454 Ms B Ndandani Executive: Legal and 605 455 18 284 142 426 - 766 165 (Acting from 15 October Aviation Compliance 2018 - 31 March 2019) 23 101 352 1 002 470 4 084 693 14 896 951 43 085 466
* Seconded to the Department of Transport from 15 October 2018. ** Includes a retention bonus paid to executives every three years in accordance with the Board-approved retention policy.
154 Annual Report 2018 | 2019 PART E - Financial Statements PART A General Information Consolidated Annual Financial Statements for the year ended 31 March 2019
27. Members’ emoluments | CONTINUED
Group 2018 Salary Medical Provident Bonuses Total aid fund R R R R R Ms G Khoza DCA 2 883 333 129 438 501 353 1 201 634 4 715 758 Mr A Seedat Executive: Finance 1 660 599 125 602 375 580 569 124 2 730 905 Mr S Segwabe Executive: Aviation Safety 1 931 575 69 339 339 768 577 953 2 918 635 Operations Mr G Bestbier Executive: Aviation 1 960 984 64 872 434 649 621 015 3 081 520 Infrastructure Ms T Masooa Executive: Human Resources 1 722 895 94 158 244 910 531 431 2 593 394 Mr P Gwebu Executive: Corporate Services 1 353 853 108 612 252 728 448 068 2 163 261 Mr P Kewana Chief Audit Executive 1 486 145 81 549 274 961 479 970 2 322 625 Ms M Mamabolo Executive: Legal and Aviation 1 635 772 65 226 295 360 513 686 2 510 044 Compliance Ms N Naraindath Company Secretary 1 397 415 108 612 263 733 472 822 2 242 582 Mr L Gqeke Executive: Aviation Security 2 074 382 - 339 768 574 168 2 988 318 Mr P Mashaba Executive: Accident and 1 676 607 44 121 299 029 311 472 2 331 229 Incident Investigation Mr N de Lange Chief Executive: RAASA 1 065 620 32 446 - 210 447 1 308 513 20 849 180 923 975 3 621 839 6 511 790 31 906 784
Non-executive Directors’ fees
2019
SACAA Board Members’ Reimbursive Total Fees expenses R R R Mr E Khosa 279 741 15 389 295 130 Mr SS Mokoena 182 655 1 184 183 839 Mr S Sooklal 288 700 7 814 296 514 Ms L Dlepu 5 206 376 5 582 Major-Gen. NL J Ngema 5 206 2 300 7 506 Mr MG India 223 530 3 138 226 668 Prof. NV Dyani-Mhango 232 099 4 538 236 637 Dr BC Suckling 213 838 2 277 216 115 Mrs GB Koyana 75 464 - 75 464 1 506 439 37 016 1 543 455
Annual Report 2018 | 2019 155 PART A PART PART E - Financial Statements General Information General Consolidated Annual Financial Statements for the year ended 31 March 2019
27. Members’ emoluments | CONTINUED
Non-executive Directors’ fees | CONTINUED
2019
RAASA Board Members’ Reimbursive Total Fees expenses R R R Mr J Morrison 18 889 4 500 23 389 Mr C Jordaan 9 705 - 9 705 Mr R Wheeldon 17 469 4 500 21 969 Ms M Mochoele 13 572 2 000 15 572 59 635 11 000 70 635
2018
SACAA Board Members’ Reimbursive Total Fees expenses R R R Mr SS Mokoena 350 478 3 212 353 690 Ms DLT Dondur 350 217 4 102 354 319 Ms L Dlepu 302 067 3 906 305 973 Major-Gen. NL J Ngema 285 396 21 441 306 837 Mr MG India 271 510 2 695 274 205 Prof. NV Dyani Mhango 275 910 4 593 280 503 1 835 578 39 949 1 875 527
RAASA Board Members’ Reimbursive Total Fees expenses R R R Mr C Linakis (Resigned 12 July 2017) 14 647 3 500 18 147 Mr J Morrison 32 629 7 500 40 129 Mr C Jordaan 9 705 2 000 11 705 Mr R Wheeldon (Appointed 15 August 2017) 17 469 4 000 21 469 Ms M Mochoele (Appointed 13 April 2017) 20 358 3 500 23 858 94 808 20 500 115 308
Fees
Reimbursive expenses are disclosed in terms of Treasury Regulation 28 (1) (4) of the PFMA as reimbursive costs paid to Board members. The costs include flights, car hire, accommodation and travel costs for all meetings of the Board and its committees.
156 Annual Report 2018 | 2019 PART E - Financial Statements PART A General Information Consolidated Annual Financial Statements for the year ended 31 March 2019
28. Risk management
Capital risk management
The group’s objectives when managing capital are to safeguard its ability to continue as a going concern in order to provide return for its owner and benefits for its stakeholders, and to maintain an optimal capital structure to reduce the cost of capital.
The capital structure of the group consists of cash and cash equivalents disclosed in note 3, and equity as disclosed in the statement of financial position.
As the group is not exposed to debt, there is no meaningful debt to equity ratios, such as gearing ratio, to be disclosed. There are no externally imposed capital requirements.
There have been no changes to what the group manages as capital. The strategy for capital maintenance or externally imposed capital requirements remained the same as in the previous year.
Financial risk management
The group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.
Management meets on a regular basis to analyse interest rate exposures and evaluate treasury management strategies against revised economic forecasts. Compliance with policies and exposure limits is reviewed by management on a continuous basis. Management believes that, to the best of its knowledge, there are no significant undisclosed financial risks.
Liquidity risk
Liquidity risk refers to the risk that the group will encounter difficulty in meeting obligations associated with financial liabilities.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. Management is satisfied that the group will be able to settle its financial liabilities (payables and provisions) in the normal course of business.
The group’s risk to liquidity is a result of the funds available to cover future commitments. The group manages liquidity risk through an ongoing review of future commitments and credit facilities.
Cash flow forecasts are prepared and adequate utilised borrowing facilities are monitored.
The liquidity ratio below illustrates:
Description Group SACAA 2019 2018 2019 2018 R R R R Current ratio Current assets 376 615 208 366 717 943 376 170 948 365 903 614 Current liabilities 158 384 791 143 526 025 157 768 678 143 161 094 2.38:1 2.56:1 2.39:1 2.56:1
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28. Risk management | CONTINUED
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The group is exposed to interest rate risk, as it invests funds in the money market at floating interest rates. At 31 March 2019, no derivative financial instruments were used to manage the group’s exposure to interest rate risk.
The group has adopted a policy of investing the majority of surplus cash in call account investments as a means to safeguard and mitigate interest rate risk. The risk is further managed through the fact that the surplus funds are invested in reputable financial institutions.
Credit risk
The group is exposed to credit risk, which is the risk of financial loss to the group if a counterparty to a financial instrument fails to meet its contractual obligations.
Credit risk consists mainly of cash deposits, cash equivalents, derivative financial instruments and trade and other receivables. The group only deposits cash with major banks with high quality credit standing and limits exposure to any one counter-party.
Trade receivables comprise a widespread customer base. Management evaluated credit risk relating to customers on an ongoing basis. If customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, risk control assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk limits are set, based on internal or external ratings in accordance with limits set by management. The utilisation of credit limits is regularly monitored.
Certain credit limits were exceeded during the reporting period, and where management considered these debtors to be impaired, a provision for doubtful debts was raised.
Financial assets exposed to credit risk at year-end were as follows:
Description Group SACAA 2019 2018 2019 2018 R R R R Financial instrument Trade receivables less unallocated receipts 71 351 878 64 685 006 71 321 197 64 650 003 Other debtors 3 309 675 1 302 840 3 306 896 1 298 607 Staff advances 130 208 61 700 127 383 61 700 Cash and cash equivalents 300 107 608 306 339 587 299 699 631 305 564 494 374 899 369 372 389 133 374 455 107 371 574 804
158 Annual Report 2018 | 2019 PART E - Financial Statements PART A General Information Consolidated Annual Financial Statements for the year ended 31 March 2019
28. Risk management | CONTINUED
Default
Default occurs when: a) credit limits are exceeded; b) payments are not received within the approved period.
In such cases the necessary collection measures were taken with due regard to the financial risk connected to a specific debtor account. Collection measures included handing accounts over to the Legal Department for follow-up.
As at 31 March 2019, the group did not consider that any significant concentration of credit risk existed in the receivable book, which had not been adequately provided for.
The table below provides an analysis of credit risk exposure inherent in the loans and receivables book at the year-end reporting dates, reconciled to the carrying value of net trade receivables as reported in note 4 and 5.
GROUP 2019 Direct Indirect Total charges charges R R R Trade Receivables Current balance 2 161 485 52 886 224 55 047 709 Overdue balance 8 761 929 7 825 593 16 587 522 Subtotal 10 923 414 60 711 817 71 635 231 Impairment provision (6 537 520) (2 987 250) (9 524 770) Net trade receivables 4 385 894 57 724 567 62 110 461
GROUP 2018 Direct Indirect Total charges charges R R R Trade Receivables Current balance 236 854 47 776 107 48 012 961 Overdue balance 12 221 606 4 881 040 17 102 646 Subtotal 12 458 460 52 657 147 65 115 607 Impairment provision (6 291 150) (2 987 250) (9 278 400) Net trade receivables 6 167 310 49 669 897 55 837 207
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28. Risk management | CONTINUED
SACAA 2019 Direct Indirect Total charges charges R R R Trade Receivables Current balance 2 161 485 52 877 022 55 038 507 Overdue balance 8 761 929 7 804 114 16 566 043 Subtotal 10 923 414 60 681 136 71 604 550 Impairment provision (6 537 520) (2 987 250) (9 524 770) Net trade receivables 4 385 894 57 693 886 62 079 780
SACAA 2018 Direct Indirect Total charges charges R R R Trade Receivables Current balance 197 607 47 776 107 47 973 714 Overdue balance 12 225 850 4 881 040 17 106 890 Subtotal 12 423 457 52 657 147 65 080 604 Impairment provision (6 291 150) (2 987 250) (9 278 400) Net trade receivables 6 132 307 49 669 897 55 802 204
Definitions
Direct charges include regulatory fees and calibration fees. Indirect charges include passenger safety fees and fuel levies.
Liquidation
As soon as it becomes known that a debtor has been placed into provisional liquidation/sequestration or has been placed into final liquidation/sequestration, the credit facility is automatically revoked. All debtors in liquidation have been provided for in full as irrecoverable.
Foreign exchange risk
The group incurs currency risk as a result of expenses in foreign currencies, hence exposure to exchange rate fluctuations arises. The currency in which the group primarily deals is the US Dollar. No forward cover is taken out for these transactions. Management considers the foreign currency risk to be insignificant.
160 Annual Report 2018 | 2019 PART E - Financial Statements PART A General Information Consolidated Annual Financial Statements for the year ended 31 March 2019
29. Going concern
The consolidated annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.
30. Events after the reporting date
The South African Civil Aviation authority (SACAA) has taken over all the functions and operations, assets, liabilities and contingent liabilities of RAASA with effect from 01 April 2019.
Management is not aware of any significant events that occurred after the reporting date that were not adjusted or disclosed in the consolidated annual financial statements. Furthermore, management is not aware of any circumstances which exist that would impede the group’s ability to continue as a going concern.
31. Prior period errors
During the financial year under review, it was discovered that the additional expenses relating to the Microsoft Software Licence fee were not accounted for in the prior years.
The comparative amounts relating to the statement of financial position and statement of financial performance have been restated as follows:
Description Group SACAA 2019 2018 2019 2018 R R R R Statement of financial position Increase in trade and other payables - (3 195 635) - (3 195 635) Decrease in opening accumulated surplus - 1 369 558 - 1 369 558
Statement of financial performance Increase in software licence expense - 1 826 077 - 1 826 077
Annual Report 2018 | 2019 161 PART A PART PART E - Financial Statements General Information General Consolidated Annual Financial Statements for the year ended 31 March 2019
32. Irregular expenditure
Description Group SACAA 2019 2018 2019 2018 R R R R Opening Balance 161 500 - 161 500 - Add: Irregular Expenditure - current year 2 228 346 161 500 2 228 346 161 500 Add: Irregular Expenditure incurred in prior year and 4 296 496 10 830 4 296 496 10 830 identified in current year Less: Amounts condoned - (10 830) - (10 830) Irregular expenditure to be condoned 6 686 342 161 500 6 686 342 161 500
Details of irregular expenditure – current year Services procured without following supply chain 2 228 346 regulations 2 228 346
The irregular expenditure of R2 228 346 and R4 296 496 incurred in the current year and prior years respectively, relates to contract variations greater than 15% of the initial value of the contract that were not pre-approved by National Treasury. The matter is still under investigation.
The balance of R161 500 carried forward from the prior year related to the utilisation of a service provider that was not tax compliant. The service provider fraudulently confirmed that he was tax compliant.The amount was condoned by the Board after year-end.
33. Fruitless and wasteful expenditure
Description Group SACAA 2019 2018 2019 2018 R R R R Opening balance 5 448 72 354 5 448 72 354 Add: Fruitless & Wasteful expenditure current year - 5 448 - 5 448 Less: Amounts condoned - (72 354) - (72 354) 5 448 5 448 5 448 5 448
The fruitless and wasteful expenditure related to interest and penalties charged for the short-payment of PAYE. The amount of R5 448 was condoned by the Board after year-end.
162 Annual Report 2018 | 2019 PART E - Financial Statements PART A General Information Consolidated Annual Financial Statements for the year ended 31 March 2019
34. Investments in controlled entities
The SACAA consolidated the results of the Recreation Aviation Administration South Africa NPC (RAASA) in accordance with the requirements of GRAP 6 (Consolidated and Separate Financial Statements).
The SACAA’s control relates to its power to govern the financial resources and operating policies of RAASA, so as to obtain benefits from its activities. The SACAA also appoints four of the eight directors of RAASA including the chairperson, whilst receiving non- financial benefits as described below.
The RAASA is incorporated in South Africa. The purpose of RAASA is to ensure compliance with the South African Civil Aviation regulations affecting sport and recreational aviation and to liaise with non-profit bodies that represent sport aviation.
The group results are fully disclosed in the accompanying consolidated annual financial statements.
The SACAA has taken over all the functions and operations, assets, liabilities and contingent liabilities of RAASA with effect from 01 April 2019.
35. Budget variances
Material differences between budget and actual amounts
The material variances between actual and budgeted above 5% or in excess of R2 million can be explained as follows:
Interest received
Interest received is R4 620 706 higher than budget as a result of surplus funds invested and better cash flow management.
Other income
Other income is R1 013 417 lower than budget due to lower event sponsorship income from aviation partners.
Passenger safety charge
Passenger safety charge is R6 914 057 lower than budget due to lower passenger numbers than expected. SACAA budgeted to grow passenger numbers by 2.5% and the actual growth for the year was 1%.
Fuel levy
Fuel levy is R2 529 491 lower than budget due to lower volume growth in aviation fuel supply to general aviation and cargo.
Personnel cost
A saving of R8 397 574 on personnel cost was realised, mainly due to vacant positions created by resignation not being filled immediately. The budget assumed a total staff complement of 619 employees and the actual headcount at 31 March 2019 was only 575 employees.
Annual Report 2018 | 2019 163 PART A PART PART E - Financial Statements General Information General Consolidated Annual Financial Statements for the year ended 31 March 2019
35. Budget variances | CONTINUED
Operating expenses
Operating expenses is higher than budget by R4 369 049 due to unforeseen legal expenses, higher software expenses and high international travel cost to attend international ICAO events.
Depreciation and amortisation
Depreciation is lower than budget by R4 326 209 due to the re-assessment of the useful lives of some assets and the delay in the budgeted acquisition of a replacement flight inspection aircraft.
Repairs and maintenance
Repairs and maintenance is higher than budget by R1 841 396 due to higher than expected maintenance on the old flight inspection aircraft as well as maintenance cost on the buildings.
Finance costs
Included in the budget for finance costs was the amortisation of interest relating to the financing of the replacement aircraft for the flight inspection unit. Due to the delay in the acquisition of the aircraft, the budgeted amount of R2 654 974 was not incurred.
Bad debts written off and debt impairment
Bad debts written off for the year amounted to R1 016 912. The debt impairment provision for the year was increased by R246 370 due to an increase in the recoverability risk of some of the debtors owing at year-end.
Loss on disposal
The condition of fixed assets are evaluated during the year and disposed and/or scrapped where no future economic benefits are anticipated. The loss on the disposal of these assets was not included in the budget.
Changes from the approved budget to the final budget
The changes between the approved and final budget are a consequence of reallocations within the approved budget parameters. These adjustments and reallocations were necessary to align the revenue budget with actual trends in activity levels and the expense budget with business needs.
164 Annual Report 2018 | 2019
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Telephone No.: +27 11 545 1000 | Fax No.: +27 11 545 1465 Email Address: [email protected] | Website Address: www.caa.co.za
ISBN Number: 978-0-621-47376-6